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Thread: Non-Resident Landlord Tax

  1. #1
    Join Date
    Aug 2004
    Location
    Inland Canterbury, NZ
    Posts
    8,390

    Default Non-Resident Landlord Tax

    Had a big bill in today from my managing agents. I am now being charged Non-Residents Landlord Tax @ 22% on my UK rental property.

    Has anyone else had any dealings with this? I know that management agents have to do this as I've been out of the country for more than six months and this is my "Place of abode" as defined by the Inland Rev... and obviously I declared my income from the flat when we were in the UK - but I could put "expenses" against it in our returns (i.e. repairs, maintenance, new bathroom etc) which usually meant I ended up paying v. little tax on that income stream - can't see a way of doing that with the Non-Res Landlord tax :?

    Any help/advice/experiences gratefully received.

    Could really have done without receiving a big bill like that on a Friday

  2. #2
    Join Date
    Aug 2004
    Location
    ChCh as of 06/11/2004
    Posts
    288

    Default

    Not something I have had to deal with but can't you just fill in form NRL-1? I assume the double taxation rules should then cover your tax liability assuming you declare the income in NZ.

    http://www.hmrc.gov.uk/nonresidents/fagnrl1_bw.shtml

  3. #3
    Join Date
    Apr 2005
    Location
    Sumner, Christchurch NZ
    Posts
    578

    Default

    And if you can't stop Gordon and his chums from getting his hands on your 22% in the UK, presumably you could use the amount paid to reduce any tax liability you have in NZ?

  4. #4
    Join Date
    Aug 2004
    Location
    Shrewsbury
    Posts
    168

    Default

    It depends on how much rent you are getting.
    If it is less than the personal allowance per year (about 4900 I think), you fill in the NRL-1 tax form which your estate agents should sign and send to the IR on your behalf. This allows them to pay you your rent without deducting tax. Otherwise, by law they must deduct tax, regardless of whether it is over your allowance or not.


    Graham

  5. #5
    Join Date
    Aug 2004
    Location
    Inland Canterbury, NZ
    Posts
    8,390

    Default

    Yep, it's over the 5k mark.

    So, I assume that the IR will somehow tie up the NRL Tax payments that the estate agents are making, with our tax returns that we do already? I don't remember giving any info to the estate agents in terms of my N.I or tax numbers - so I wonder how they are referencing it?

    Obviously I am also asking these questions of my agency, except they're a bit slow in getting back to me - seems the reason that I had 100's of taken out of this months rental is because they were audited a few weeks back and as I'm their only overseas landlord they hadn't done things correctly since March 05 and, consequently, muggins here gets slapped with March thru August tax deductions in one fell swoop.

  6. #6
    Join Date
    Aug 2004
    Location
    Wigan UK
    Posts
    1,619

    Default

    Helen

    loads of people, family included kept asking me why don't you rent your house if you can't sell. The tax was the major reason we didn't

    Jo

  7. #7
    Join Date
    Aug 2004
    Location
    Pompy UK - Rangiora SI
    Posts
    993

    Default

    We received a letter from the IR a few months back with an application form to apply to have our rent paid with no tax deducted. We received a reply saying that we can have the rent without tax deducted (which is what was happening anyway). We will probably get a tax return to fill in, but I think we will be under the personal allowance as the house has only been rented since October (assuming the year runs to April)

  8. #8
    Join Date
    Aug 2004
    Location
    Inland Canterbury, NZ
    Posts
    8,390

    Default

    Jo

    I'd pay that tax anyway - in income tax - so it had already been "built into" the costs of running the rental etc for the last 10 yrs or so that we've rented it out. It's just that we have always done our own tax returns and the accountant offsets alot against the rental income - I think I'm just sore because has been taken away from me without a) consulting me and b) asking what our tax position was in the first place.

    For instance, I had a 4k bathroom fitted before we left for NZ - that, along with expenses, maintenance, repairs etc, negates any tax I should pay.....

    Bloody I.R.....

  9. #9
    Join Date
    Aug 2004
    Location
    Wigan UK
    Posts
    1,619

    Default

    Aye bloody I.R.

  10. #10
    Join Date
    Sep 2005
    Location
    Cornwall UK/ then Auckland
    Posts
    7

    Unhappy personnal allowances

    can someone please help me here.
    As I am led to believe by my UK accountant under the double taxation agreement I can earn rent in the UK up to my personnal allowance before we get taxed and cannot get charged tax by NZ IR.

    However on ringing NZ IR today it appears they will charge me tax on that rental income because the UK IR haven't!

    Does anybody know which is right?

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