Hello everybody!
I have a property in uk currently let using a letting agency
I am not resident in uk
The property, fully furnished, has been let since April 2010
I don't have any other income from UK and I don't have any mortgage on the property
I complete an NRL1 and the HM Revenue and customs approved my application to receive rental income with no tax deducted
After I received a letter saying that I should complete a tax return each year
So I used the web site hmrc.gov.uk to fill the self assessment
I have just filled the tax return for the year ended the 5th April 2011 on internet at hmrc.gov.uk/self-assessment
The rental income and expenses are entered on Form SA105 :
Box 18 - Rental Income from tenant.
Expenses are entered in boxes 22- 27
Box 22 - insurance and ground rent etc
Box 23 - repairs expenses
Box 24 - 0 ( no mortgage loan )
Box 25 - letting agent fees .
Box 27 - 100 ( post & Tel/Broadband contact with letting agent)
Allowance if applicable :
Box 34 - 10% ( for furnished lettings only) .
Box 36 - adjusted profit
Box 38 - taxable profit.
I think I filled everything
Regarding the personal allowances I read that:
A personal allowance of up to £6,475 is claimable by non-residents of working age and can be used to reduce potential income tax charges
filling the self assessment online in the section "on line calculation" i see:
This section provides you with a breakdown of your full calculation.
Profit from UK land and property £4.500,00
Total income received £4.500,00
minus Personal allowance £6.475,00
Total income on which tax is due £0,00
How we have worked out your income tax
the amount Personal allowance £6.475,00 was created automatically and there is no way to ament cancel modify anything
is it correct?
many thanks :)
marco
Replies (12)
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Residence pages
You also need to complete the SA109 - Residence questions. This is where you declare your non-resident status and fill in the necessary information for the system to decide if you are entitled to a personal allowance or not.
Personal Allowance
Marco,
With regard to the PA, the upshot is that some - not all - non-residents qualify. It depends on where you are. For instance - if you live in Australia then the PA was rescinded fairly recently.
Tell us how you get on. Good luck.
tladirect
British Citizen
@tladirect - I think the PA is still available in Australia if you are a british citizen? (not available necessarily if just a commonwealth citizen). I'm happy to be corrected if wrong...
Guidance notes for R43
http://www.hmrc.gov.uk/cnr/r43-notes-2011.pdf
This is the clearest guidance I have found-
UK citizen or EEA national (plus a few misc categories) - allowances regardless
Commonwealth citizen - allowances if you live in that country still.
There is also a list of the countries where being a national of and resident in qualifies you if you have certificates of residence etc etc
Personal Allowance - Australia
Marco,
Glad you have sorted it out!
Winstonb,
I recently looked into this matter for an Australian citizen and resident (British expatriate) who holds dual nationality and came to the conclusion that they were ineligible for a personal allowance...if memory serves...because they did not fall into the "eligible list" that Marco begins to cite above. As I was surprised Australia was not included I searched further only to find that the PA had - in 2010 - been rescinded.
If this is not so then I should very much welcome being corrected.
tladirect
What nationality / passport
tladirect -Forgive me for my assumption but if you are a British expat doesn't that mean you are born in Britain - in which case you continue to qualify for personal allowances wherever you live.
If born in Australia, and living there, you also continue to qualify provided you can prove with a passport and a certificate of tax residence. If you follow the link above to part 3, but keep reading you will see another list which deals with this kind of qualification. I think it is to do with the Double Taxation agreement but could be wrong there
Marco - if you view the return before submitting it, it should show you the residence sections it has given you as complete. It is not too late to change the entries if you do not fit into one of the qualifying categories so I would suggest if you are not happy you ring the Online helpdesk to get their assistance in amending the entries
Nationality/Passport
Marion,
The person was indeed born in Britain and emigrated to Australia where they currently and permanently reside. Dual nationality/passports are held.
Do you have a specific reference that deals with this situation?
Many thanks
tladirect
tladirect
It is amazing what you take for granted - it is just one of those things I always knew but found the following
http://www.hmrc.gov.uk/incometax/tax-leave-uk.htm
Tax-free allowances for non-residents
If you're a European Economic Area citizen (including British), or a current or former Crown employee, you'll still get your tax-free allowances to reduce the amount of UK Income Tax due. Members of certain other special groups also qualify.
But it should be declared in Aus
Had to check this again this year. Full PA on UK return for UK citizen but income assessable in Aus
Resorted to....
Marion, Chris,
I resorted to telephoning HMRC. According to their technical bod, essentially:
British citizen = PA.
I admit I had originally felt this to be the case because there is something "right" about it but conscious "sensible" cannot always be applied to UK tax.
With regards to income assessable in Australia - definitely - I had no doubt about that. Looks like HMRC's loss may be Australia's gain.
Many thanks both.
Marco - if you are still with us thanks for your patience!
tladirect