Landlord as overseas citizen

Hi I have a relative who bought the property next door to me. They have no ties at all to the UK other than their property. All rental taxes will be paid overseas.

I’m helping out as I’m here and work from home. I’ll do the grunt work of letting and management.

We’ve filled in NRL1 and talking to agents my relative has absolutely no tax liability here in the UK.

But looking at govt docs they all seem to be geared towards UK citizens who live overseas because there’s repeated mention of tax liability even for nonresident landlords.

Can someone help point me to the official documentation that spells this out so we can both be really clear what the cashflow from tenancy income will be?

I’m asking because this does seem to be a special enough case that Openrent have said they can’t offer rent collection services, for instance.

I’m not an international tax expert so don’t know the rules in detail, but the income would be taxable in the UK wherever they live. It will depend on where they live, whether they are a British citizen etc as to whether they get a personal allowance.

There could be a tax liability if the non-resident landlord is not entitled to a personal allowance or their profit is more than the personal allowance.

If they do the NRL1i, they will usually have to do a self assessment form whether they have tax to pay or not and it looks like you can’t do it online via HMRC’s website because the HMRC system probably doesn’t have all of the forms. You can do a paper return (deadline October) or use commercial software (eg Individuals & Self Employed - Tax Filing Software | Taxfiler).

These links might help…

The rules for rental income…

Whether or not they get a personal allowance…

Also, if they do have to pay tax in the UK, they may get a refund of some or all of that in the country they live in, depending on double tax treaties between them and the UK.

You are putting yourself at risk with this arrangement. An overseas landlord is legally required to pay UK tax on UK rental income. If they have not made a specefic arrangement with HMRC then the agent is liable to deduct the tax at source and pay it themselves and could be prosecuted for not doing so. If you are acting as agent then you have that role.

Edit: Cross posted with Cath2.

Thanks. Anyone here have actual experience doing this? That document is exactly the problem because the wording suggests it is for UK citizens who are nontax domiciled.

The owner needs to get in touch with HMRC and make an arrangement and you need evidence of the outcome to protect yourself.

I’ve filled one in for a UK domicile going abroad, but it was about 10 years ago. I seem to remember it wasn’t the most intuitive form ever. I can’t see what’s on the form now though because it’s one of those stupid interactive ones.

That is what they are trying to do with the NRL1 form.

Ok, thanks. I missed that.

Thanks. I’m going to get an accountant who has done this stuff for someone in a similar position.