HOW TO BUY PROPERTIES IN THE UK
Currently there are two options available to you to hold property in the UK, both are correct and your choice will depend on your own personal circumstances. If you have property(s) that you do not have large mortgages owed then register as an individual as the tax rules on NRLS mortgage interest and wear and tear allowances are changing where these will no longer be so favourable (Please see below an article we recently published on Buy to Let tax changes for the UK.) The alternative to holding properties in your own name is holding the properties in a limited company If you leave things as is, the estate agents are obliged to deduct 22% off your rental income and pay this over to the UK HMRC. To avoid this you will need to register as a non-resident land lord and in return you need to complete a UK self-assessment tax return where you are taxed on the profits at 20%. With the personal allowance currently at £10,000 there is usually is no tax to pay on this side.
Exceed can assist you in registering as a non-resident landlord in order for the tax being deducted by the estate agent not to be withheld and you only paying tax on the profits less your personal allowance. We usually charge you £150 for the registration with our HMRC.
Please find attached the link to HM Revenue and Customs website you need to follow to apply for your properties to be granted NRLS status here in the UK: (We have attached the first page of the website for your information for individuals, companies and trusts) At the bottom of the page click next to go to the subsequent pages to complete until the end.
https://www.hmrc.gov.uk/cnr/nrl1.pdf. Please complete the application online save it as you go along and then print it for your signature. Prior to the sign off, please email us a scanned copy of the completed form for us to check if it has been completed correctly. Exceed will let you know and then you can then post the original signed forms to our office. We will send it to HMRC on your behalf. If there are joint ownership of the property, it has to be completed and signed for each individual.
As a non-resident landlord you should complete a United Kingdom (UK) Self-assessment Personal Tax Return on an annual basis. You are non-resident in UK for income tax purposes, but where UK property is let, the rental income is treated as being from a property business. You will therefore be taxed on all the rental profits. Our fee for the completion of a Self-Assessment Tax Return is £200/250 (ex Vat). Exceed would also need you to sign off the attached form 64-8 authorising Exceed to act as your agents here in the UK. Please also complete these forms and return them to us with the original NRL1 form.
Limited Company alternative to holding properties in your name. A limited company is created here in the UK and the properties are owned by the company. There are more set up (£250) and annual compliance costs. The company will need a bank account and have to complete annual financials and pays 20% corporation tax on its profits.