Working abroad - UK rental income - Eric?

[CaptainSlow]

Quick question please. If I were to be working abroad and became a tax resident there (US) (earning above the UK's 40% bracket), I understand that there are double taxation treaties so I won't be taxed on the employment income in the UK.

Now if I were to rent out my UK property, how would this be taxed (~£18k pa)? In the UK or US? If in the UK what would my marginal rate be, ie would I get a personal allowance and the balance at 20% or would the US earnings be taken into account and I'd pay 40% on it?

[Eric Mc]

The normal situation is for an agent to be appointed to handle the rental income. The agent will deduct 20% tax on the rents received and pays this tax to HMRC. He passes teh net rent over to you.

If you are completing a US tax return, you should get credit for UK tax paid IF that type of income would normally be taxed in the UK.
I am no expert on US tax so do not know whether you are required to declare UK rental income to the US tax authorities.

[sumo69]

If the OP's tax affairs are in order and is becoming non-UK tax resident, he can apply to receive rents gross via the Non-Residents Landlord Scheme - no need to have 20% taken off the top each month. A SA tax return will be needed to declare the rental income and any surplus will be taxed as normal.

David

[CaptainSlow]

Thanks to both.

David..re surplus. What is the definition of this?

[Lawrence5]

Useful resource......

http://www.hmrc.gov.uk/agents/toolkits/property-re...


As above - get rents without tax deduction - form...

http://www.hmrc.gov.uk/cnr/nrl1.pdf

Useful if you have interest/expenses to relieve any profit/surplus

[Lawrence5]

Oh and have a look here if you are leaving the UK

http://www.hmrc.gov.uk/cnr/p85.pdf