Landlord tax return advice

I'm after a bit of advice from any Landlords who may have lived this already:

I'm serving overseas, own a house which is rented out. We're getting ready to square away whatever the taxman needs - but I'm not 100% clear on the process. I've had a shufti at the .gov website which was as ever inscrutable civil-servantese and I've used the Arrse search function. If anyone can talk me on a bit closer it would be appreciated.

1. I thought I had to complete a NRL1 - and that would go through the percentages to be taken off the rental income, less expenditures on upkeep. Looking at the website it is not immediately clear the NRL1 is what I need - there are umpteen different NRL codes. What document should I be looking for (as someone paying full UK tax so presumably counted as domiciled for tax, in the UK, regardless of serving overseas)?

2. The Memsahib and I jointly own the house. She is currently unemployed out where we are. I have been told we can 'offset' some of the tax burden against her allowance which being unemployed, would be of benefit. Is this possible from whatever document answers point 1 - or is this something separate?

3. To get the house rentable, we had to buy a new boiler (to get the EPC to E). I would expect this to be deductable. However, very kindly my parents paid for it - and provided a cheque directly to the installers (as opposed to giving us the money and then it leaving our bank). Does this change matters - it was still an expense 'we' had to pay and therefore does it matter which bank account our payment arrangements took place from?

TIA - I'm hoping this is a well trodden path for another arrser so I don't immediately have to immerse myself in HMRC regs.
 

philc

LE
I'm after a bit of advice from any Landlords who may have lived this already:

I'm serving overseas, own a house which is rented out. We're getting ready to square away whatever the taxman needs - but I'm not 100% clear on the process. I've had a shufti at the .gov website which was as ever inscrutable civil-servantese and I've used the Arrse search function. If anyone can talk me on a bit closer it would be appreciated.

1. I thought I had to complete a NRL1 - and that would go through the percentages to be taken off the rental income, less expenditures on upkeep. Looking at the website it is not immediately clear the NRL1 is what I need - there are umpteen different NRL codes. What document should I be looking for (as someone paying full UK tax so presumably counted as domiciled for tax, in the UK, regardless of serving overseas)?

2. The Memsahib and I jointly own the house. She is currently unemployed out where we are. I have been told we can 'offset' some of the tax burden against her allowance which being unemployed, would be of benefit. Is this possible from whatever document answers point 1 - or is this something separate?

3. To get the house rentable, we had to buy a new boiler (to get the EPC to E). I would expect this to be deductable. However, very kindly my parents paid for it - and provided a cheque directly to the installers (as opposed to giving us the money and then it leaving our bank). Does this change matters - it was still an expense 'we' had to pay and therefore does it matter which bank account our payment arrangements took place from?

TIA - I'm hoping this is a well trodden path for another arrser so I don't immediately have to immerse myself in HMRC regs.

Point 2

If your receiving income from the property and its owned jointly this is income your wife is receiving and earning. Now it depends on the amount she is earning, if its over £11,500 she will pay tax. If below then some can be off set I believe.

Point 3

All the tax man will want to see is a invoice, my managing agents pay bills for me, deduct at source, I just ping in the invoice as a deduction.
 
I'm after a bit of advice from any Landlords who may have lived this already:

I'm serving overseas, own a house which is rented out. We're getting ready to square away whatever the taxman needs - but I'm not 100% clear on the process. I've had a shufti at the .gov website which was as ever inscrutable civil-servantese and I've used the Arrse search function. If anyone can talk me on a bit closer it would be appreciated.

1. I thought I had to complete a NRL1 - and that would go through the percentages to be taken off the rental income, less expenditures on upkeep. Looking at the website it is not immediately clear the NRL1 is what I need - there are umpteen different NRL codes. What document should I be looking for (as someone paying full UK tax so presumably counted as domiciled for tax, in the UK, regardless of serving overseas)?

2. The Memsahib and I jointly own the house. She is currently unemployed out where we are. I have been told we can 'offset' some of the tax burden against her allowance which being unemployed, would be of benefit. Is this possible from whatever document answers point 1 - or is this something separate?

3. To get the house rentable, we had to buy a new boiler (to get the EPC to E). I would expect this to be deductable. However, very kindly my parents paid for it - and provided a cheque directly to the installers (as opposed to giving us the money and then it leaving our bank). Does this change matters - it was still an expense 'we' had to pay and therefore does it matter which bank account our payment arrangements took place from?

TIA - I'm hoping this is a well trodden path for another arrser so I don't immediately have to immerse myself in HMRC regs.
Speak to an accountant.

The peace of mind they can bring, for a low outlay is well worth the spend.
 
Don't forget that, as an overseas landlord, you should be having the theoretical relevant amount of tax deducted from your rental income monthly by your management company, which they submit to HMRC quarterly. You then quote this on your tax return as already paid.
I got used to this scheme and tried to keep it going when I got back to UK, as it saved paying the extra bill at the end of the tax year, but it is not allowed for UK-resident landlords.

E2A - Ahh, that's what the NRL1 is about! I did not know that it was an option, as my letting agent just started to deduct the theoretical tax at source when I was posted to Cyprus and I thought it was better than having to pony up at the end of the year. I have been doing self-assessment since 2006 (when I started to rent out the house) and it is so quick and easy online. I keep a little excel spreadsheet of rental income and expenditure over the year (yes, the new boiler was business expense) and the totals go in all the relevant boxes. I can crack the self-assessment in under 2 hours now, but my income is just my RAF salary, the rent, and minor interest on investments. Do not expect to see all the expenditure back as a rebate, though.
 
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4th’d on getting an accountant to do it all.
 

Aphra

War Hero
You might want to have a look at:


I can't personally vouch for it, but it's well regarded as a resource for, well, Landlords.

While I second @alfred_the_great recommendations of getting an accountant to deal, I'd also recommend you retain one who is experienced in absentee/ex pat landlord taxation. An online search throws up plenty who claim to be able to help but I'm sure there must be a way to locate one who really knows their stuff.

Edited to add, I couldn't see the other posts above so tagged in people who have already replied. Fastest fingers first!
 
Further to my last...

Have engaged an accountant, thanks to all for that steer.

The accountant advised asking the mortgage provider for a 'transfer of beneficial interest' to the wife, keeping the mortgage the same - so tax could be taken against her allowance (she is unemployed this posting). The provider said no. I have half a suspicion the muppet in the call centre didn't actually know what this was so said they didn't do it but hey ho.

I have just realised/discovered, that one's mortgage is not deductible (stand fast interest). I (naively) thought the profits on which one is taxed on, is comprised of net gain. Apparently the whole shebang.

On this basis I don't know how any single property landlords make any profits at all, and as this is the situation that a lot of regualr service landlords are in, it seems harsh. Anyone got any thoughts/mitigation?
 

NewbishDelight

Old-Salt
I have just realised/discovered, that one's mortgage is not deductible (stand fast interest). I (naively) thought the profits on which one is taxed on, is comprised of net gain. Apparently the whole shebang.

On this basis I don't know how any single property landlords make any profits at all, and as this is the situation that a lot of regualr service landlords are in, it seems harsh. Anyone got any thoughts/mitigation?
It used to be.

I sold my rental flat a year or so ago for exactly this reason (although rather regretting it with current house price growth). I more-or-less broke even after taxes, but the mortgage went down pretty steadily so I viewed that and my gain on house price as my profit.

If you are sending in self-assessments, do not forgot to add in your mileage, home office use etc. - it all adds up. You can also (unless you are using an agent) claim for business travel to check on the property.
 
Further to my last...

Have engaged an accountant, thanks to all for that steer.

The accountant advised asking the mortgage provider for a 'transfer of beneficial interest' to the wife, keeping the mortgage the same - so tax could be taken against her allowance (she is unemployed this posting). The provider said no. I have half a suspicion the muppet in the call centre didn't actually know what this was so said they didn't do it but hey ho.

I have just realised/discovered, that one's mortgage is not deductible (stand fast interest). I (naively) thought the profits on which one is taxed on, is comprised of net gain. Apparently the whole shebang.

On this basis I don't know how any single property landlords make any profits at all, and as this is the situation that a lot of regualr service landlords are in, it seems harsh. Anyone got any thoughts/mitigation?
George Osborne’s legacy to the rental market. There are ways around it if you own specifically to rent; putting ownership into a limited company or partnership being the obvious one.

If you’re an “accidental” landlord letting your primary residence because you’re posted overseas, it’s probably better to suck up the tax as the cost of moving your house into a limited company probably outweighs the tax paid
 
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