Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Rental income is taxable in the UK irrespective of the owner's residence and tax status. Providing the owner is a citizen of the EEA then they have the usual personal allowance, currently 11K, to offset this income.
This income may, in addition, be liable for taxation in the country in which they reside. Providing that country has a Double taxation Treaty with the UK then any tax paid in the UK will be allowed as a tax credit against the liability in the other.
I do hope that you have found my reply of assistance.
I would advise you to complete the return. If you voluntarily disclose your earnings and explain your position living overseas, you may well find HMRC lenient regarding penalties particularly if there has been no or minimal loss of revenue. You will, of course, have to pay interest on unpaid tax, but that is reasonable when you considered HMRC themselves pay interest on refunding over paid taxes.
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