Income from UK property

DoubleEnder

DoubleEnder

Well-Known Member
Joined
27 Apr 2002
Messages
1,562
Location
N Hemisphere
Visit site
I asked this in the Lounge by mistake.. It's been interesting but there has been a certain amount of drift.

Does anyone here use UK residential property too provide a cruising income? Eg rent out one or more houses/flats in UK while not living in UK? I'm pretty aware of the various risks, costs associated with the concept. I have been an accidental landlord the last 2 years, and it has been a pretty painless experience. But are there any things specific to doing this while living (on a boat) out of the country? Any good/bad experiences that anyone can share? I'd be very interested

Thank you

Graham
 
Very common as it means you can keep a foot in the UK property market for when you return/retire/get the bug out of your system (or run out of money).

The same rules as any other type of property let. You have to decide furnished/unfurnished and whether you are going to manage it DIY from a distance or give up part of your rental income to have it professionally managed. Many people are inclined towards the latter as they don't want to worry about chasing the rent or fixing the plumbing etc. On the other hand some people have friends or relatives who can manage the property on your behalf.

Rental markets are generally strong at the moment, so suggest you call in a a sample of letting agents in the area of the property and find out what the options are. Most agents have a range of services varying from just finding a tenant, doing the agreement to full management so you can choose the level that suits you.
 
We rented out our place because the rental income wouldn't have been any less profitable than the interest from the sale of the place. As Tranona says it's nice to know we still have bricks and mortar as we embark on the liveaboard lifestyle....a bit of a security blanket in case anything goes wrong.
Keeping the house in our name also gives us the excuse to still use our doctor/dentist if needs be as they don't know we have rented.
We did the agency route as we wanted minimal hassle, though I must say if anything goes wrong you still have to make the ultimate decisions. So far in six months our boiler has gone bust and we have a bees nest in our soffits. The agency have done all the phoning around and we have just paid the bills.
The income from our rental property will finance most of our monthly outgoings. We are having an expensive few months just now as we pay off the people who re-fitted our boat, but normally the income from the house covers our home expenses, phone bills, life assurances etc and our meagre savings pays for food, booze, mooring fees and any other incidentals.
We will probably need to work in the winter months for the first couple of years just to keep the pot afloat, which we wouldn't have had to do if we had sold up.....but we prefer to have that safety net of property ownership just now.
 
I would also suggest that you get a good accountant. One who will make sure your returns are completed, all allowances & costs claimed and all monies owed to the Rev&Cust paid promptly. No nasty surprises when you return. His fees (about £300 inc VAT) will also be deductible and a good accountant will save you a lot of money & grief.

Di
 
We rent out a number of properties in the south west and have done so for the past thirty years or so. We complete a return annually and as we are NT we have permission to receive rents gross as NR landlords. Its a simple and profitable process especially when you use an agent to take care of the day to day problems. Better that any pension unless of course you worked for local government.
 
mocruising said:
We rent out a number of properties in the south west and have done so for the past thirty years or so. We complete a return annually and as we are NT we have permission to receive rents gross as NR landlords. Its a simple and profitable process especially when you use an agent to take care of the day to day problems. Better that any pension unless of course you worked for local government.
Click to expand...

+1 -Get a good agent or agents - they are worth the fees!
 
WestWittering said:
I would also suggest that you get a good accountant. One who will make sure your returns are completed, all allowances & costs claimed and all monies owed to the Rev&Cust paid promptly. No nasty surprises when you return. His fees (about £300 inc VAT) will also be deductible and a good accountant will save you a lot of money & grief.

Di
Click to expand...

+1
 
RAI said:
Look up Non-Resident Landlord on the HMRC web site. They have a handy leaflet.
Click to expand...

+1

Your letting agent (if you use one) should process the application for you and will then pay your rental income to you Gross. When you complete your tax return you will be asked if you have a NR landlord agreement. Just tick the box and all Will be taken care of by the tax man.

Andy
 
AMCD300 said:
+1

Your letting agent (if you use one) should process the application for you and will then pay your rental income to you Gross. When you complete your tax return you will be asked if you have a NR landlord agreement. Just tick the box and all Will be taken care of by the tax man.

Andy
Click to expand...

Which is great if you wish NOT to use your personal allowance. Again, get a good accountant & not someone who is an just "an agent for the Revenue" as my accountant husband would describe them..... Unless I've read your post wrongly as it a bit ambivalent ....

Di
 
Last edited:
lovezoo said:
Why would the OP be non-resident? Surely its simpler for him to continue being tax-resident in the UK rather than becoming tax resident in the places he is visiting?
Click to expand...
If the OP has second UK address to use as his residence, then fine. But for someone letting out his only property there is a trap. His tenant is obliged to pay the council tax and may not want to accept that the landlord is also registered as "resident" at his address, when he is not. A resident landlord (who then pays the council tax for the address) may have only one non-relative lodger. Most people renting prefer the contractual rights of a tenant over those of a lodger.

It gets tied up with income tax on the rent and capital gains tax relief on the property when it finally changes hands. If an agent is not involved, the tenant is actually obliged by law to pay the rent less income tax and submit the tax to HMRC - unless the landlord proves to the tenant that he has NRL status, which he can hardly do if he supposedly lives at the same address. An agent has to do the same thing.

Check out the HMRC website leaflets on tax on rental income, tenants verses lodgers, HRL tax on rental income and capital gains tax relief on rented property.

There are other pitfalls. If one borrows a UK address, say from a relative/friend and then applies for a driving license renewal using that address, for example. Then the relative/friend can be committing an offence if they confirm the (false) use of their address. They may not be aware of this but get pretty peeved when they subsequently find out.

Sadly the law is set up for people having one main residential address, somewhere, taxable. A boat in a marina does not qualify.

However, it's amazing what people get away with.
 
>Sadly the law is set up for people having one main residential address, somewhere, taxable. A boat in a marina does not qualify.

If you are long distance sailing and thus don't have a fixed address you can apply for not resident and not ordinarily resident after four tax years away. That's what we did.

If you stay in a marina overseas then as you say you have an address but the IR are unlikely to know you don't go anywhere provided you don't use the marina as an address. If away use a holding address (a relative or a company) and have the important mail sent to you. Bear in mind it is a huge task to inform everyone you deal with of your new address.
 
so who do you stay in touch with?

Very interesting and a bit concerning.

What do people think are the 'essentials', ie people/organisations that you should try to remain hooked up to, who need to have an address? I'd say:

Bank/credit card company
Passport
DVLA for driving license
Boat insurance.
Inland Revenue ( I guess...)
NHS (registered with a GP)
National Savings for when you win the premium bonds
SSR
Any other financial service eg private pension provider

Is that everyone? Who did I miss?

Graham
 
That just about does it, I think, although you might like to add DSS if you are still paying NI or expecting/getting a state pension (and don´t forget the winter fuel allowance, while it lasts, although if your friends are over pension age, they´ll be getting it as it is per address, not per person).
 
RAI said:
Check out the HMRC website leaflets on tax on rental income, tenants verses lodgers, HRL tax on rental income and capital gains tax relief on rented property.
Click to expand...
But the practicality is, unless the OP is permanently moving out of the UK, it is much easier just to continue paying his UK tax as normal and stay UK tax resident. He will be of much less interest to a foreign tax office if he can show he is still paying his tax in the UK.
 
You must log in or register to reply here.

Share this page

Top