HMRC & Tax
Town & Country Estate Agents can, at extra cost, provide annual reports for self-assessment tax purposes.
We are FICO registered and ss such we are able to pay rents gross to non resident landlords on receipt of a certificate from the Inland Revenue, copies of the relevant application forms are available from the following links.
Landlords need to be aware that the Inland Revenue have to be informed within 6 months of letting a property, flat or apartment in the U.K. Failure to do this could result in penalties, interest and other consequences. This includes all individuals and Companies regardless, of their residency. Therefore non U.K. residents cannot escape these obligations!
Non- resident landlords must obtain authorisation from the Inland Revenue so that they can receive payment of property rental income “Gross”.
Without this authorisation, the letting agent or tenant will deduct Income Tax from the rent due and pay it over to the Inland Revenue, as required by Law.
Your accountants can take care of obtaining authorisation from the Inland Revenue, on your behalf. Income Tax is normally payable from Rental Property. Many individuals do not declare “Rental Income” from rental flats, apartments or properties to the Inland Revenue. Over the years they have experienced many of the reasons put forward by landlords. The main ones being:
“I have not made enough profit through renting…”
Although the landlord may feel a profit has not been made due to expenditure being more than the rent received, not all expenditure may be tax deductible! The fact is that you have received monies in respect of rent, this makes the landlord liable to disclose his source of income to HMRC.
“The Revenue will not find out what I am doing…”
The Inland Revenue are very aware of people evading Income Tax by not disclosing rental income from flats, apartments, and other property.
All letting agencies have to disclose names and addresses of landlords.
Inspectors of Taxes review property letting advertisements in the local or national papers
The Inland Revenue also receive a high number of anonymous, tip-offs from individuals.
They also examine Council Tax records.
“I was not aware I had to advise anyone…”
Letting agents, Banks or Building Societies, National Television and Press make landlords aware of their tax obligations with respect to rental apartments and property. Sorry, there is no excuse! With the right advice tax planning your accountant can minimise your tax liability from rental property. Non-Declaration of rental income receives increasing harsh treatment from the Inland Revenue; we therefore encourage you to consider avoiding the situation.
Capital Gains Tax
This is a very complex area of taxation and professional advice should be obtained. Basic Tax Planning can avoid large Tax Bills on rental apartments and other rental property. This tax is chargeable on rental properties that have been rented for any time and subsequently sold. However there are exceptions to the general rule. Planning can minimise or even eliminate a Tax liability.
Darbys - Chartered Certified Accountants
Darby’s are a firm of Chartered Certified Accountants with many years of experience in dealing with the tax affairs of landlords relating to property rental, both in the U.K and abroad.
They would be delighted to clarify any matters with you and also to provide you with a written quotation for work they would carry out.
Tel: 01909 531135 • Email: firstname.lastname@example.org • Web: www.darbys.com