UK property to let
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UK property to let
Thinking of buying a property to let near London. I'm a non uk resident working in HK. Need a property management company. Any recommendations? What about the cost and tax involved? Thanks
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You are right, you need professional advice. I think it is correct to say that if you own a property in the UK and it is not your primary residence then you may have a tax liability to HMRC, should you rent it out.
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You can either apply for permission to pay via self assessment or your landlord or tenant will have to pay HMRC the basic rate direct from the rent https://www.gov.uk/tax-uk-income-live-abroad/rent.
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As a long standing UK property owner and landlord I can assure of this
1. If you own a property in the UK and let it out you are liable to income tax on that rental income minus some deductables. If you do not live in the property for more than 6 months a year yourself then you cannot claim it to be your own residence and so when you come to sell it, it is liable to Capital Gains Tax too. You can register as an overseas landlord and receive your income without tax deduction but at the end of each year you must make a non-resident tax return and pay the tax due. As a non-resident you get zero allowances and can be taxed at the non-resident rate of 40%.
2. All these returns and information are available from the HMRC website and to manage the tax side is simple. As a non-resident landlord you cannot file on-line.
3.If you need to manage the property on a day to day basis then you can try to do this from overseas but it will keep you busy. Better to use a good agent and the new on-line agents are great and inexpensive eg Purple Brick. Agents in Hong Kong are very expensive and to be avoided.
4. If you try to dodge the UK tax man good luck. Last year 4 Emirate pilots and 2 Ethiad pilots got caught, fired and fined. They were lucky not to go to prison.
5. If you want a coventional agent try Complete RPI Limited.
1. If you own a property in the UK and let it out you are liable to income tax on that rental income minus some deductables. If you do not live in the property for more than 6 months a year yourself then you cannot claim it to be your own residence and so when you come to sell it, it is liable to Capital Gains Tax too. You can register as an overseas landlord and receive your income without tax deduction but at the end of each year you must make a non-resident tax return and pay the tax due. As a non-resident you get zero allowances and can be taxed at the non-resident rate of 40%.
2. All these returns and information are available from the HMRC website and to manage the tax side is simple. As a non-resident landlord you cannot file on-line.
3.If you need to manage the property on a day to day basis then you can try to do this from overseas but it will keep you busy. Better to use a good agent and the new on-line agents are great and inexpensive eg Purple Brick. Agents in Hong Kong are very expensive and to be avoided.
4. If you try to dodge the UK tax man good luck. Last year 4 Emirate pilots and 2 Ethiad pilots got caught, fired and fined. They were lucky not to go to prison.
5. If you want a coventional agent try Complete RPI Limited.
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if you are buying a property to rent the stamp duty is also charged at a higher rate
Property Price. ...........Stamp Duty ..........Buy to Let/ Additional Home Rate*
£0 - £125,000. ................0%. .......................3%
£125,001 - £250,000. .....2%......................... 5%
£250,001 - £925,000. .....5%......................... 8%
£925,001 - £1,500,000. .10%....................... 13%
There are calculators online that you can use if you want
Property Price. ...........Stamp Duty ..........Buy to Let/ Additional Home Rate*
£0 - £125,000. ................0%. .......................3%
£125,001 - £250,000. .....2%......................... 5%
£250,001 - £925,000. .....5%......................... 8%
£925,001 - £1,500,000. .10%....................... 13%
There are calculators online that you can use if you want
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As a long standing UK property owner and landlord I can assure of this
1. If you own a property in the UK and let it out you are liable to income tax on that rental income minus some deductables. If you do not live in the property for more than 6 months a year yourself then you cannot claim it to be your own residence and so when you come to sell it, it is liable to Capital Gains Tax too. You can register as an overseas landlord and receive your income without tax deduction but at the end of each year you must make a non-resident tax return and pay the tax due. As a non-resident you get zero allowances and can be taxed at the non-resident rate of 40%.
2. All these returns and information are available from the HMRC website and to manage the tax side is simple. As a non-resident landlord you cannot file on-line.
3.If you need to manage the property on a day to day basis then you can try to do this from overseas but it will keep you busy. Better to use a good agent and the new on-line agents are great and inexpensive eg Purple Brick. Agents in Hong Kong are very expensive and to be avoided.
4. If you try to dodge the UK tax man good luck. Last year 4 Emirate pilots and 2 Ethiad pilots got caught, fired and fined. They were lucky not to go to prison.
5. If you want a coventional agent try Complete RPI Limited.
1. If you own a property in the UK and let it out you are liable to income tax on that rental income minus some deductables. If you do not live in the property for more than 6 months a year yourself then you cannot claim it to be your own residence and so when you come to sell it, it is liable to Capital Gains Tax too. You can register as an overseas landlord and receive your income without tax deduction but at the end of each year you must make a non-resident tax return and pay the tax due. As a non-resident you get zero allowances and can be taxed at the non-resident rate of 40%.
2. All these returns and information are available from the HMRC website and to manage the tax side is simple. As a non-resident landlord you cannot file on-line.
3.If you need to manage the property on a day to day basis then you can try to do this from overseas but it will keep you busy. Better to use a good agent and the new on-line agents are great and inexpensive eg Purple Brick. Agents in Hong Kong are very expensive and to be avoided.
4. If you try to dodge the UK tax man good luck. Last year 4 Emirate pilots and 2 Ethiad pilots got caught, fired and fined. They were lucky not to go to prison.
5. If you want a coventional agent try Complete RPI Limited.
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if you are buying a property to rent the stamp duty is also charged at a higher rate
Property Price. ...........Stamp Duty ..........Buy to Let/ Additional Home Rate*
£0 - £125,000. ................0%. .......................3%
£125,001 - £250,000. .....2%......................... 5%
£250,001 - £925,000. .....5%......................... 8%
£925,001 - £1,500,000. .10%....................... 13%
There are calculators online that you can use if you want
Property Price. ...........Stamp Duty ..........Buy to Let/ Additional Home Rate*
£0 - £125,000. ................0%. .......................3%
£125,001 - £250,000. .....2%......................... 5%
£250,001 - £925,000. .....5%......................... 8%
£925,001 - £1,500,000. .10%....................... 13%
There are calculators online that you can use if you want
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Is it not right that a UK citizen, and any EU/EEC national in fact, get a personal allowance? Up to £11850 this year. That for UK based income such as rental income, you don't have to tax anything on? Regardless of where you actually reside, HKG? Would unitedabx like to comment on that?
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Is it not right that a UK citizen, and any EU/EEC national in fact, get a personal allowance? Up to £11850 this year. That for UK based income such as rental income, you don't have to tax anything on? Regardless of where you actually reside, HKG? Would unitedabx like to comment on that?
You might want to consider setting up a company to buy and rent out your UK property. This way you as the individual stays clear of HMRC and different tax rules apply but still no allowance.
The UK places no restrictions of property purchase from overseas unlike many countries including NZ, Australia, USA, Thailand and many more.
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It is not a requirement to be a resident to be eligible for a Personal Allowance. Last year I re-filed my UK tax and had my UK tax bill reduced to zero on this basis. All may be viewed on GOV.UK in the section Tax On Your UK Income If You Live Abroad. (I’m not allowed to post a URL).
Personal Allowance
You’ll get a Personal Allowance of tax-free UK income each year if either:- you’re a citizen of a European Economic Area (EEA) country - including British passport-holders
- you’ve worked for the UK government at any time during that tax year
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unitedabx, not true. You ARE entitled to a tax free allowance in the UK as a passport holder, even if you are non-resident. You can claim it by filling in form R43.
I'm unable to post the link but search R43 on the HMRC website and you'll find it, there's also a notes document there explaining it also.
I've been doing this for the last few years successfully, and as mentioned above would also recommend Acorah softwares Tax Calc.
I'm unable to post the link but search R43 on the HMRC website and you'll find it, there's also a notes document there explaining it also.
I've been doing this for the last few years successfully, and as mentioned above would also recommend Acorah softwares Tax Calc.
With reference to whether you get a Personal Allowance, please google this and look at the first item displayed "Tax on you UK income if you live abroad: Personal Allowance - GOV.UK"
The biggest change in recent times for UK by to let purchases is the ability to claim finance deductions, it use to be possible claim mortgage interest but that is now being wound back and being replaced by a tax credit, currently, this is in the transition period.
As for management companies, probably best to have one of the local agents in the area look after it, perhaps even the agent you buy from could be a negotiating point on their management fees. They all charge typically around 10% or more for full management, less if you just want them to do the rent collection. Normally this includes regular inspections of the property, limited basic maintenance without your input and more involved maintenance with your consent. The problem is that you will never know how good they truly are until you have problems whether it be with the tenants or the property itself.
When your looking for a place, put things like the big-ticket items such as windows/doors and boiler at the top of the list of needs, should look for newer installs as that should give you some clear time without any significant maintenance costs. Also another tax consideration only maintenance not improvements is considered an allowable deduction. Say if you brought a place with single glazed windows and then replaced them with double glazing, this is an improvement and would not be an allowable deduction. But if you already had double glazing and they needed replacement due to the condition of them it would be considered maintenance and allowable.
Finally, another new requirement to consider, rental properties have to have an energy performance certificate of E and above, so something to consider when selecting a property. This was effective from 1st April 2018.
The biggest change in recent times for UK by to let purchases is the ability to claim finance deductions, it use to be possible claim mortgage interest but that is now being wound back and being replaced by a tax credit, currently, this is in the transition period.
As for management companies, probably best to have one of the local agents in the area look after it, perhaps even the agent you buy from could be a negotiating point on their management fees. They all charge typically around 10% or more for full management, less if you just want them to do the rent collection. Normally this includes regular inspections of the property, limited basic maintenance without your input and more involved maintenance with your consent. The problem is that you will never know how good they truly are until you have problems whether it be with the tenants or the property itself.
When your looking for a place, put things like the big-ticket items such as windows/doors and boiler at the top of the list of needs, should look for newer installs as that should give you some clear time without any significant maintenance costs. Also another tax consideration only maintenance not improvements is considered an allowable deduction. Say if you brought a place with single glazed windows and then replaced them with double glazing, this is an improvement and would not be an allowable deduction. But if you already had double glazing and they needed replacement due to the condition of them it would be considered maintenance and allowable.
Finally, another new requirement to consider, rental properties have to have an energy performance certificate of E and above, so something to consider when selecting a property. This was effective from 1st April 2018.
