Q. I have a few buy to let properties that until now I have managed myself. However I am planning to retire overseas within the next few months so have naturally been reaching out to agents to discuss the prospect of handing over the management of my properties to a professional to deal with given I will no longer be in the country. There’s obviously a lot to consider and one of the things they have flagged up is the Tax side of being an overseas landlord. I understand that I have two options with respect to this but I am not totally sure I understand the process. Could you walk me through it?
A. Firstly it’s certainly very wise to appoint an agent to look after your assets if you are no longer going to be a resident Landlord. It’s virtually impossible to keep tabs on your tenants as well as react to any would be issues in a timely fashion. An agent is on the ground and able to respond quickly to any maintenance issues as well as carry out regular routine visits to ensure your property is being looked after and maintained in a suitable manor. Do make sure that you use a regulated agent though, instructing a member of ARLA (Association of Residential Lettings Agents). All their members are qualified professionals and must follow a strict code of conduct. With respect to the tax, yes you do have two options. The first option is you allow your Agent to deduct tax at source. So they will as per the guidelines from HMRC deduct tax (currently as 20%) for you and pay HMRC directly on your behalf. The other option and the most popular one for most overseas landlords is that you complete an NRL1 from; this is available on the HMRC website as an electronic form. You will need to ask your agent for their HMRC registration number before completing the form as this will need to be added. Once completed, HMRC will issue an ‘Approval Certificate’ which allows the agent to send you all your revenue collected from the rent without any deductions. You will then be free to deal with your tax liability yourself. Further information surrounding the Non- Resident Landlords scheme can be found at www.gov.uk