Tax Resources and Information for Landlords Including FICO Downloads

Tax Notes for Landlords

This page is to help landlords and buy to let investors understand the complexities of dealing with Her Majesty’s Customs & Revenue when letting property in London and the U.K.

Buy-to-let is a proven mechanism for investing and long-term wealth creation. However as with any investment proper financial and legal advice is essential.

There are many legal ways for landlords to limit their tax liabilities, it is strongly recommended that landlords buying property to let take independent accounting advice from a chartered accountant who is a member of The Institute of Chartered Accountants in England and Wales.

We’ve listed some do’s and don’ts as well as other useful information when dealing with HMCR (www.hmrc.gov.uk)

1 Don’t try and evade your tax liabilities. HMCR has mind bogglingly wide-ranging powers to investigate and track all payments of rent from tenants, whether you use an estate or letting agent or let your property privately

2 Income from property letting is subject to UK tax

3 Keep ALL paperwork, invoices and receipts, however insignificant that relate to the letting and on-going management of the property for at least 5 years

4 There are sometimes advantages in forming companies or trusts to buy property again. Once again, specialist advice from an accountant is advised

5 All expenses “wholly and exclusively” relating to the property that is let can be off-set against your tax liability. Primarily these include:
i. Mortgage interest on the original loan secured against the property being let
ii. Broadly speaking - 10% depreciation allowance against wear and tear
iii. Agents’ and professional fees relating to the property

6 There are special rules for non-resident landlords. The government has clamped down massively on tax evasion by overseas landlords. Any person or organisation passing rental income to a non resident landlord is responsible for accounting for all monies and payment of tax to HMCR. Non resident landlords must register (with FICO) in order to receive rental income without deduction of tax. You can get a FICO registration form download here and scrolloing down to "Tax and non-resident landlords".

Chard lettings is FICO registered and will be able to pay rental income to you without deduction of tax following a simple registration procedure

Useful links:

HMCR non-resident landlords scheme – full notes
The Institute of Chartered Accountants in England and Wales