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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15975
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am an overseas landlord leaving in Luxembourg. I have been

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I am an overseas landlord leaving in Luxembourg. I have been asked by my new letting agent to complete a NR1 tax exemption form. My previous agent advised me that it would be better to give my UK address. I really do not know what is the best advice is. My new agent has already started taxing my rental income at source. What should I do? Should I do anything?

There is nothing to be gained by concealing your actual address in Luxembourg as HMRC will find it if they need to. However, I know some non-UK resident landlords use the letting address, their letting agent's address or their UK accountant's address as the UK contact address. It really doesn't matter which you choose to use.

Unless you get exemption from having tax deducted from your rental income at source, the letting agent is acting correctly and you will probably need to complete a tax return to get any excess tax deductions repaid to you at the end of the tax year. The letting agent is trying to get exemption as they have asked you to complete a form NR1. The criteria for qualifying for letting income to be paid to you without deduction of tax at source can be found here.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.

Ideally I would prefer not to fill in the NR1. I would probably be taxed on that income in Luxembourg anyway and my brother got a large tax bill after supplying information to HMRC. I do not really trust them to deal fairly with me.

If you don't want to complete the NR1 then tax will definitely continue to be deducted from the UK rental income and you will need to complete annual tax returns in order to reclaim any excess tax. The only way around that is to give HMRC the impression that you are not a non-resident landlord which the letting agent may be loathe to do.

HMRC don't set out to be unfair to anybody. That would be a ludicrous and completely unacceptable situation. They make mistakes like every individual and organisation on the planet without exception. If your brother had a large tax liability then, unless the calculations were incorrect, he must have had the income to produce that liability. Accountants or tax advisers can make sure that any client of theirs does not pay more tax than is due.
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