Overseas landlords

Overseas landlords have extra issues to consider –  we take care of them all

UK resident landlords have a responsibility to inform the Inland Revenue of rental income received and to pay any tax due.

Where we are managing a property and collecting the rent for a landlord that we know is going to be resident outside the UK during a tenancy for more than six months in total, Daisy Lets & Sales are required to retain and forward to the Inland Revenue on a quarterly basis, an amount equal to the basic rate of income tax from rental received (currently 20%), less certain expenses. However most overseas/Non resident landlords prefer to be in control of their own tax and pay it at the end of the tax year via their self assessment tax return. This is because the personal tax allowance is taken into account and expenses that we may not know about can also be deducted first before arriving at the final tax figure due. Don’t forget if the property is jointly owned there are two allowances.

Application Form

An online application form (NRL1i) for exemption from basic rate deductions and further information may be obtained from the Inland Revenue. We recommend you apply as soon as you know you will be renting your property as it can take a few weeks for the letter to be send through to us with your exemption number. You do not need to know the exact figures in advance, you can estimate the amount of rent expected and expenses for the purposes of filling out the form.

You will need our NRL Scheme number to insert on the form:

London Office: 904/NA 042239

The HMRC will then write to us authorising us not to take the tax at source, and to pass over the full rent to yourselves. They give us a number personal to you, without this number we will have to deduct the tax. You are able to claim it back at the end of the tax year via your self assessment tax return. If we have taken tax, we produce a certificate for you to include on your tax return once the tax year ends, before July.

• For overseas landlords that have not applied or received ‘approval’ to received their full rent, we will submit accounts to the Inland Revenue quarterly and you will receive a certificate as evidence of any tax that has been paid on your behalf at the end of the tax year, before July.

• Daisy Lets & Sales are obliged to provide an annual return to the Inland Revenue for all non-resident landlords.

• We charge a quarterly fee for overseas landlords to cover admin costs if tax has to be taken (in addition to full management fees) of £50. There is an additional annual fee of £50 to all overseas landlords for the annual return required regardless of their NRL status, we are obliged to make this annual return.

If a landlord lives overseas but lets a property in England or Wales on an assured shorthold tenancy (AST) and takes a security deposit. Daisy Lets & Sales will have to protect their tenants’ deposit by placing it in a government backed custodial scheme. We use the DPS (Deposit Protection Service) for this purpose, we do not hold deposits for any properties let on an AST ourselves.

If you and a partner own your property(s) together you will both need to apply under the NRL Scheme for exemption individually. Because we have to produce the annual returns for the NRL Scheme for all our overseas landlords, we have to produce two statements, one for each of you every month. This means the rent will be shown as 50% each (unless instructed otherwise) and two payments will be made out from us – even if to the same bank account details. We can set up any amount of owners and any percentage split you request as applicable to your circumstances and ownership.

If you own multiple properties they will all be under your same “Landlord account” on our system unless instructed otherwise, which depending on when the rents fall, means you may see maintenance deductions for one property on the same statement as rent from another. We will also have to split the “float” of £250 per property held between you and your partner(s), and you will see on your statement any maintenance repair deductions reflecting this split. For e.g., if a property is set as owned by yourself and your partner 50/50, the maintenance will also be deducted as 50% each.