Self assessment for overseas landlords

If you let out a property in the UK and you are UK non-resident or you are a UK resident that lives abroad for more than 6 months in a year that rents out property, then you will need to pay tax on any rental income you get in the UK. You will be required to a UK Self Assessment tax return. Below are details about Self Assessment.

Key UK tax dates
The tax year in the UK runs from 6th April to 5th April.

If you are due to pay tax then it is due on the 31st January in year 2.

You must notify HMRC if you are required to prepare a Self Assessment tax return by 5th October following the tax year that the income first arises.

UK resident landlords that live abroad
A landlord who lives abroad for more than 6 months of the year must pay tax on any income they get from renting out property in the UK. If the landlord is a company or trustee, the rules about their usual place of abode apply.

The tax is collected using the Non-resident Landlord Scheme.

Payments on account for rental income
If your tax liability for a year exceeds £1000 then you will be required to make two payments on account of year 2 of one half of the year 1 tax liability. These payments on account will need to be paid on 31st January and on 31st July.

If your liability equates to more than the payments on account then the balance is due on 31st January. If your liability less than the payments on account, there will be a refund of the difference along with a small amount of repayment supplement.

What are the penalties for late Self Assessment returns?
On the day your tax return is late you have a penalty of £100. For each day after the first and up to 90 days you incur a penalty of £10 per day. This equates to total penalties of £1,000 if you are three months late.

After the first three months, the penalty is £300 or 5% of the tax due — whichever is the higher.

And at the end of the 4th quarter there is another £300 or 5% of the tax due — whichever is the higher.