NRL Tax Registration Threshold

NRL Tax Registration Threshold

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Hi all,  does the self assessment tax registration threshold for landlords/property income, of net profits of £2,500 or more (and nothing to do with the personal allowance), apply to non-resident landlords as well?  So 1) they need to register for self assessment even if they will not incur any tax and 2) they have the £2,500 limit where the rental deductions do not apply?  Just making sure no "exceptions" to the rules here.  HMRC link for registration threshold: http://www.hmrc.gov.uk/sa/need-tax-return.htm.  Thanks

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Euan's picture
By Euan MacLennan
10th Feb 2014 10:38

If you believe that link ...

... you will believe anything.

Under the law set out in s.7 TMA 1970, there is no legal obligation to notify chargeability to tax (register for self-assessment) if there is no liability to income tax or capital gains tax.  Nor is there any de minimis of £2,500.

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By Steve Kesby
10th Feb 2014 11:01

Ah but...

... they might be a company director Euan! :)

Seriously though, if they're a non-resident landlord then their tenant or agent will need to deduct tax from the rental receipts, unless they register under the NRL scheme; meaning that they will then be issued with notices to deliver tax returns, irrespective of profit level or any other HMRC misinformation.

This link follows the law that applies more closely: http://www.hmrc.gov.uk/international/nr-landlords.htm

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By Marion Hayes
10th Feb 2014 11:09

Agree with Euan

The £2,500 relates where there are PAYE sources which can be used to collect tax through the code numbers.

As a Non-resident landlord the rent collection agency should have notified HMRC and be taxing the rent before sending it on.  The only way to avoid this is to register for the NonResident Landlord Scheme requesting gross payment. They will automatically issue returns to those landlords

May be being a little dense here but what £2,500 under which rental deductions do not apply?

Edit : Must be quicker!! Still typing whilst Steve had posted

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By nicoletheaccountant
10th Feb 2014 11:13

Hi Euan, really, so I shouldn't always believe what I read at HMRC as something enforceable?  It stresses me out that they put the guidance up there but it often conflicts with other things I know/read.  Incredibly frustrating.  I hate people having to pay money for tax returns when not really necessary.  I may ask you more questions like this if it results in such favorable answers :)

Hi Steve, OK so you think that if they are a NRL they must submit returns what ever the case (even though no tax liability due and the NRL approval would almost certainly be granted)?  This is what I have told them but thought it worth asking the question in case there is a way out of it.

Thanks for the quick responses guys

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Euan's picture
By Euan MacLennan
10th Feb 2014 11:50

NRL & Self-Assessment

There is no requirement for the landlord to notify chargeability to tax if he will not have a tax liability.  However, HMRC may well choose to issue tax returns to him (in which case, he must submit them) if they are not satisfied that the total rental income, less agents' fees, will never exceed the UK tax-free personal allowance to which the non-resident may be entitled.

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By Martin B
10th Feb 2014 12:45

NRL Tax Registration Threshold

flagging

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