Key UK taxes
Key UK taxes
Capital Gains Tax:
Non-resident landlords have to report the disposal of any UK property within 30 days of disposal to HMRC through the completion of a Non-resident CGT return. This applies regardless of whether there is any liability to UK CGT. The NRCGT return is also required even if the disposal will be reported elsewhere, e.g. through the annual Self-Assessment tax return.
Currently for such disposals any CGT due is payable within 30 days of completion, unless you are already completing a self-assessment return and can therefore choose to defer payment until the 31st January payment deadline following the 5th April tax year end.
However, from 6 April 2020 all CGT liabilities on residential property disposals will require a payment on account within 30 days of disposal and can no longer be deferred to be paid on the 31st January following the filing of the self-assessment tax return.
Note: CGT is a complicated area of taxation and it is essential to seek professional advice " we work closely with a number of excellent tax advisors " please ask us for a recommendation.
However, to avoid this an application can be made by the landlord to HMRC for a non-residential landlord exemption number. Once a letting agent has this they can pay over the full rent amount. It is possible to reduce the income tax exposure by including interest payments on loans. Even if an application is made to HMRC any income tax due would still be required to be settled through the completion of a self-assessment tax return.
Note: This is a complicated issue and further professional advice should be sought.