Under Self-Assessment, landlords are legally required to keep and retain records, enabling a tax return to be completed or to make a claim for relief. This is a legal requirement Landlords should take independent financial advice from an accountant regarding this, as it can be complex and rules do change periodically.
If you would like Henry Spencer & Sons Ltd to introduce you to a reputable accountant, please let us know.
Some important points to consider include:
- Landlords are now responsible for assessing their own tax.
- Income tax is payable on letting income whether the landlord lives in the UK or abroad. Expenses are only allowed if incurred during the letting period, but there are provisions for claiming expenses on an un-let property.
- For all lettings, the landlord can claim tax relief for maintenance, repairs, insurance, management fees, ground rent, and interest on a loan to purchase or improve the property. Mortgage interest can be used to offset against rental income to produce a greater tax saving.
- Landlords with furnished lettings may claim tax relief for insurance, repair of contents for reasonable wear and tear – either on a replacement basis or as a concessionary 10% of rental income.
- A landlord’s income from rented properties – furnished, unfurnished is now lumped together and assessed under Schedule A an accountant will be able to help with this.
Non-Residents Landlords Scheme
If you live abroad for 6 months or more per year, you’re classed as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC) - even if you’re a UK resident for tax purposes.
If this is a case then you will need to register for the Non-Residents Landlords Scheme with HM Revenue and Customs (HMRC). Please click here.
We look after a number of overseas landlords and therefore can guide you through the process.