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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I'm taking a career break from December 2014 to March 2016. During

Resolved Question:

I'm taking a career break from December 2014 to March 2016.
During this time I will be letting my house to help cover the mortgage (this will not be profitable - I just want to reduce my monthly costs while away)
During this time away I will not be working (so will receive no income)
I don't understand if I need to file for non residential landlord status. or how the whole tax situation works in this case.
This year is mid tax year, all of the following tax year away
Really difficult to know how to proceed
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

How many days do you envisage spending in the UK between December 2014 and 5 April 2015 and between 6 April 2015 and 5 April 2016?
Customer: replied 3 years ago.

Hi

The plan is for myself and my partner (we jointly own the house) to be away for the full duration December 2014 to March 2016

We will only return if there is an emergency or if our money runs out. We will be going backpacking

Expert:  TonyTax replied 3 years ago.
Thanks.

Leave this with me while I draft my answer.
Customer: replied 3 years ago.

thanks, ***** ***** to your response

Just need to know what steps i need to undertake to make sure everything is in order

Expert:  TonyTax replied 3 years ago.
Hi again.

Take a look at the notes on the non-resident landlord scheme here.

Even though you may not wish to claim non-UK residence and since you will have no income whist abroad other than your rental income there is probably no point, as you will be outside the UK for more than six months, you will need to register with the scheme. Look under the heading "Who are non-resident landlords" and "Usual place of abode".

You can apply to have rents paid gross as you will read under the heading "Condition for applying.......".

If tax is deducted from your rental income, you can have any excess tax repaid to you by completing tax returns after the end of the tax year.

I would normally advise an individual who is going to live abroad to complete a P85 before they leave to get any tax overpaid on earnings back as they won't use all their personal allowance but as you won't be formally claiming non-UK residence, you might not bother and you can claim back any excess tax deducted from earnings at the end of the tax year. The P85 is not really to be used to cover extended holidays but I thought I'd tell you it exists.

I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 3 years ago.
I have to go out for a short while but will be back in 30 minutes or so to answer any follow up questions that you may have.
Customer: replied 3 years ago.

Hi

As the property is joint owned, do both of us have to apply as non resident landlords or just one of us

we are both currently on PAYE and paying 40% tax and neither of us have to complete a tax return at the moment

how will this link in?

how do you complete a tax return if you are out of the country etc

Your, information so far is helpful but really looking for a check list of actions we need to take.

Thanks

Expert:  TonyTax replied 3 years ago.
You need to apply individually. If you use a letting agent, they will complete the form NRL1 for you.
To register for self assessment, you need to complete a form SA1 which you can find at:
http://www.hmrc.gov.uk/sa/forms/sa1.pdf.
Alternatively, you could register online at:
https://online.hmrc.gov.uk/shortforms/form/SA1?dept-name=&sub-dept-name=&location=43&origin=http://www.hmrc.gov.uk
You will have earnings for the current tax year, 2014/15, so that should be disclosed in any tax return you complete, together with your rental income and expenses. As you will be travelling and may not necessarily have a base for post from the UK, you might consider having a UK based accountant or tax adviser complete the tax returns for you.
You can, if you wish, register to complete your tax return online once you have been registered for self-assessment. There is information on that at:
https://www.gov.uk/how-to-send-self-assessment-online/overview
You won't be able to complete a tax return online if you register as non-UK resident as the relevant pages are not available online so a paper return will be necessary. The answer is to not register as non-UK resident as I explained in my previous post.
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