If your landlord is non resident or let property for a non resident landlord you will need to deduct tax at source
The Non-resident Landlord Scheme
A landlord who lives abroad for more than 6 months of the year must pay tax on any income they get from renting out property in the UK. If the landlord is a company or trustee, the rules about their usual place of abode apply.
The tax is collected using the Non-resident Landlord (NRL) Scheme.
The tax can be paid by either:
# a letting agent
# the tenant
If the landlord is a joint owner, tax is paid on their own share of rental income.
If your landlord lives abroad and you pay over £100 a week, you need to register with HMRC and deduct tax from your rent.
You also need to register with HMRC if you pay a UK representative of your landlord, such as a friend or family member, who isn’t a letting agent.
You don’t need to deduct the tax if HMRC has told you in writing that the landlord can receive the rent with no tax deducted, but you must still register with HMRC and complete an annual report.
If you’re a letting agent you must operate the Non-resident Landlord Scheme no matter how much rent you collect, unless HMRC has told you in writing that the landlord can receive the rent with no tax deducted. You may still need to register and complete an annual report.
You’re considered a letting agent under the scheme if you:
help the landlord run their UK rental business
receive their rent or control where it goes
live in the UK for more than 6 months a year
A letting agent can be an estate agent, solicitor, accountant or friend of the landlord. You’re not a letting agent if you only give a landlord legal advice or services.
Rental income can include money received for a wide variety of things such as:
letting furnished, unfurnished, commercial and domestic premises or land
use of the furniture in a rented property
the grant of certain leases
sporting rights, such as fishing and shooting permits
allowing waste to be buried or stored on land
allowing others to use the property – for example, where a film crew pays to film inside a person’s house
grants to help with allowable expenses, such as repairs
enterprise investment schemes
caravans or houseboats that are not moved around
insurance policies for non-payment of rent
What you need to do
1. Register with HMRC within 30 days.
Letting agents should use form NRL4i.
Tenants should write to HMRC. Give your own name and address and that of your landlord and state that you wish to register for the Non-resident Landlord Scheme.
2. Work out and pay the tax.Send payment within 30 days of the end of each tax quarter – 30 June, 30 September, 31 December and 31 March.
3. Send a report each year by 5 July to HMRC and the landlord using form NRLY.
4. Provide the landlord with a certificate NRL6 each year by 5 July.
5. Keep records for 4 years.
You need to keep records of:
rent you’ve received (or paid, if you’re a tenant), with dates and amounts
correspondence with the landlord if you’ve contacted them about where they usually live
expenses you’ve paid, with dates, amounts and descriptions of the expenses, along with copies of invoices and receipts