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TaxRobin, Tax Consultant
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Will be leaving UK. I would like to rent my flat here. How

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Hi, I am French and will be leaving UK. I would like to rent my flat here.
How much tax will have to pay (This will be the only income I would have from UK.
The income would be around £35,000/annum. I would still have mortgage to payAlso, if I was selling that flat in a few years time, how much tax will I have to pay for capital gains?
Lena Letard

Hello and thank you for allowing me to assist you.

The rate would be 20% of the income that is over your personal allowance. As you will be a non resident landlord, your tenant or letting agent would withhold the tax or you can request that you pay tax through Self Assessment - if HMRC allows you to do this.

If you want to pay tax on your rental income through Self Assessment, fill in form NRL1i and send it back to HMRC.

If your application is approved, HMRC will tell your letting agent or tenant not to deduct tax from your rent and you’ll need to declare your income in your Self Assessment tax return.

When you sale your CGT would be on the amount after you claim the Residence Relief and letting relief.

You can get the lowest of the following:

  • the same amount you got in Private Residence Relief
  • £40,000
Customer: replied 4 months ago.
Thanks. How can I know what my personal allowance ?What is the residence relief and letting relief?
As an example, I bought the flat 660k, and will sell it 750k. how would that work?

Your personal allowance is 11,500. Residence relief is granted for the time the flat was your main home. For you that would be less than the full amount because you would not have used it for the full time.

There are 3 ways to calculate your gain or loss:

  • using the market value at 5 April 2015
  • by working out the gain over the whole period (the date the property was acquired to the date it was disposed of) and then working out what the gain since 5 April 2015 is as a proportion - known as time apportionment
  • by working out the gain over the whole period

You may no gain or some it depends on the value in 2015

Customer: replied 4 months ago.
I bought the flat on August 2015 for 660k. What is the 5/04/2015 is as a date?
Lets say I occupy it until April 2018 and then I let it until April 2020.
How would that work?

The gain would be based on the cost when you bought in 2015.

You would be allowed some relief. If you had occupied the property for 5 years whilst UK resident and then left the UK and became non-resident you would be able to sell the property within 18 months of leaving the property and not suffer any CGT due because the last 18 months qualifies for relief.

You would be allowed letting relief (40000).

In closing, please remember that he letting is still taxable to the UK because the property is in the UK.

A positive 5 star rating is appreciated so I am credited for answering.

Customer: replied 4 months ago.
Thank you. Just one last question:
So lets say I sell the flat in 2020, 800k, after removing the letting allowance, there is 180k.
What is the rate used for CGT?

Right now it would be 28% tax rates for individuals for residential property. Unknown for 2020 if sold then.

You are most welcome.

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