Managing UK Property From Overseas - Things To Take Care Of

Managing UK Property From Overseas - Things To Take Care Of

Being an absentee landlord!!

It can be done as long as you know the rules you have to follow. These rules are not so difficult that it makes managing your property from overseas difficult. It just means that it pays to get help in England.

How long you will spend overseas each year will depend on your landlord classification. For example, if you plan on being gone for 6+ months, then you will be classified as a non-resident landlord.

This classification may affect how you collect and pay rent. This is just one of the obligations you need to meet when you become an absentee landlord.

Managing UK Property From Overseas Things To Take Care Of

No matter where you live in or out of the UK when you become a landlord, you will have basic obligations to meet. One of those obligations will be paying your taxes.

This can be done by deducting 10% of your rent at the basic rate each month and then paying your taxes every quarter. This is a different way to pay than if you were a resident landlord.

Another obligation you have to meet is to ensure that all gas and electrical equipment, appliances, and wiring are in top shape, well-maintained, and installed correctly.

Then you need to make sure you supply an Energy Performance Certificate as well as have a bank account to protect your tenant's deposits. Finally, you have to make sure your prospective tenants have the legal right to rent property in the country.

You can also contact a solicitor who specializes in landlord laws to find out what other obligations you may have to meet. Knowing and meeting your legal options ensures that your property is protected while you are away.

Or you can hire a property management firm to make sure your legal obligations are met correctly. One mistake can be costly.

Overseas Landlords

One of the first things you need to do when you are considering becoming an overseas landlord is to familiarize yourself with the Non-Resident Landlords (NRL) scheme.

This document sets out all the rules you need to follow during your tenure as an overseas landlord. This status is defined by that scheme as a person who has UK rental income and whose usual place of abode is outside of the UK.

When you fall into that category, you have different options at your disposal. You can try to manage the property yourself, but that may be complicated by the great difference between you and your tenants.

Or you can hire a property management service to do all the work for you. They can also find new tenants when the old ones move or hire the right companies to make any repairs before the new tenants move in.

Or you can ask a friend or family member to keep an eye on your property, collect rent, etc. This is a good way to help prevent theft as your friend, etc., can remove letters, and newspapers, park their car in the driveway, and so on.

Those actions will help deter thieves as it looks like someone is living there while the home is empty.

UK Property Management

This is also a very good idea, and it has more merit than some people may think. The UK property management company can screen tenants for you, hire contractors to make repairs, collect the rent, keep tenants’ deposits safe, and more.

They can also help you charge the right rent, so you get a good return on your investment. They will know the local market and make sure your rents are both profitable and competitive.

These property management companies can also handle any legal issues that may arise while you are overseas. This takes a load off your mind once you find the perfect property management company for your rental situation.

The fees you can expect to pay for this service ranges between 10 and 14%, depending on your home’s location. It may be 20% off if your home is located in London. The key will be to vet your prospective property management companies before hiring one.

There are a lot of good companies, but there are also quite a few not-so-good companies. It is easy to find the latter as their prices may be lower than the better companies.

Before you sign the contract, make sure you are both clear on the duties you want them to perform in your absence. Also, check to see if they have professional indemnity insurance. This should protect your rental income.

Overseas Landlord Tax

According to the GOV.UK website, under the sub-title of rental income, you can get your rent and pay taxes in two ways:

1. Receive your full rent and then pay tax through Self Assessment - if HMRC allows you to do this.

2. The tax is deducted by your letting agent or tenant.

The deduction rate is said to be 20% now, but it may also only be 10%. Check with your local tax office to make sure. You will need to fill out form NRL1 if you want to collect your full rent and then pay through the self-assessment option.

Then the HRMC will inform your letting agent or tenant not to deduct any taxes. When it is time, you will have to declare that income on the self-assessment tax return.

There are ways to get a refund, but you would have to talk to a solicitor who specializes in taxes about how to do that.

Some Final Words

Being an overseas landlord is not impossible to do. All you need to do is follow the rules. To help you follow the rules, just give our company a call.

We have over 10 years of experience in working with overseas landlords and property management. We know the rules and can help guide you through the process, so your rental income is preserved. Call today to get the right help you need.