Under the Taxation of income from Land (non residents) Regulations 1995, the rent receiving agent (or where there is no agent, the tenant) will be required to deduct an amount equivalent to Basic Rate Tax from the rent (after taking deductible expenses paid by the agent into account) and pay the balance to the Inland Revenue each quarter.
However, the overseas landlord can apply to the Inland Revenue for exemption from this requirement. Provided the landlords tax history is good and tax affairs are up to date, the overseas landlord will be issued with a certificate that will be sent to his rent receiving agent. This will authorise the agent to pay the rent to you with no tax deducted.
We can provide you with an NRL1 form which you must complete and send to the Inland Revenue. Neither your rent receiving agent nor your tax advisor can file this application for you - it must be done by you.
Failure to return this form in time may result in the exemption certificate not being issued before the payments become due. We would have no alternative but to make the required tax deduction before paying the rents to you.
Our company are not tax advisers so if you are unsure as to how the above will affect you, you would be advised to speak to an accountant or professional tax advisor.
Any Non resident Landlord Tax payments deducted by us, in the first quarter can be refunded, if the exemption certificate is in our possession before the first quarter has ended. Any deductions after the first quarter can only be reclaimed after the first year has ended. Any refunds due after the first quarter are made by the Inland Revenue.