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"The Landlords Advice Centre"
|Landlord Tax is rarely an easy issue to understand, but after much
research and questioning we have come up with the following:
Do I have to pay tax on any income from letting my property?
This very much depends on your personal circumstances. All income collected from renting your property should be added to any other taxable income you have. However, please ensure that you keep a separate record of your ins and outs. Should your taxable income exceed your tax allowance, then you will have to pay tax. However, there are tax allowances and incentives, especially if you rent a room in the property you live.
Every landlord has a duty to declare all income received from a property so that it can be assessed for tax reasons. If you live abroad then you will need to complete a FICO form (Financial Intermediaries and Claims Office). This can be got through your agent who will then be responsible for completing it and sending it to the relevant authority. This form upon agreement from the Inland Revenue allows all the rent to be paid to you. Should you not have this form then the agent or your tenant has to withhold tax at the basic rate and ensure it is paid to the Inland Revenue on your behalf. FICO forms can be obtained directly from the Inland Revenue by ringing your nearest office.
Your agent is unlikely to be an expert on tax so it is worth seeking advice from a qualified accountant who can point you in the right direction and save you from getting fined. It is too easy to say that the Inland Revenue will never find out – I would not like to be on the receiving end should they some how come across the fact that you have been residing abroad and not declaring your income that has been generated in this country.
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