I am a British citizen and resident. I have always paid my taxes via PAYE. In July 2013 I rented my UK house out and moved to New Zealand. I registered for self assessment with HMRC before leaving the UK. I am working in New Zealand and although I had planed to only come for 12 months I am now planning on staying for a further 18 months (making a total of 2.5 years). The house is rented out for GBP12,000 pa independently of any agent and the rent is paid in to a separate bank account as per HMRC website. I am earning a salary of approx $100,000 NZD pa and having be paying tax to the New Zealand IRD on this via their PAYE equivalent. My question is how do I go about completing the self assessment tax return? I understand that if I was to be an 'overseas landlord' I would have to pay 40% tax on the gross rental. I could get a refund of the NZ tax this year but next year will probably not be counted as a UK resident next year? I do not want to pay tax on the NZ income twice and don't really want to pay 40% of the rental income especially if that doesn't take off any expenses. Is there any way I can pay the HMRC tax on the rental income in the UK (but not having to be an overseas landlord) and pay NZ IRD tax on the salary I am earning over here? Many thanks
Thank you for you speedy reply. Can I just query a few points:
Is it possible to enter a P85 'late' as I left the UK last July?
Are you still entitled to the personal allowance if you are a 'non-resident landlord'?
Is the tax rate for the 'non-resident landlord' definitely the basic rate (20%), I was under the impression it was 40%?
As I am not using a letting agent can I just pay the tax I owe on the rental income at the end of the year?
Many thanks for your help in clarifying these points