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Question about renting our house and getting a tax code
I am about to take a career break after working in public sector for last 20 plus years. My family and I are gonna head to Costa Rica for a year and we will rent out our home.
We are using a letting agent who tells us that given the low rent we are charging (approx £1300) a month and that we will be overseas, it is unlikely that we will have to pax much or any tax, as we wont earn enough.
The agent said that they will need me to register with HMRC and get a tax code so when they are paid the rent money they can apply the right tax code.
I have registered online with HMRC but am confused, as i cant see anyway to get this code, alot of the wording on HMRC says to register before October or at end of tax year.. Help!
Can anyone advise please, how do i get this tax code to give to letting agent?
I'd recommend you just fill out the paperwork with HMRC to take care of the tax yourself. Personally I wouldn't want the LA taking care of the tax for me, but maybe I'm just paranoid.
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Not true that you might need to give a year of notice - might well be the case though that it would take a year or more to get the property back and you may have unrecoverable losses.
You have to register as an overseas landlord with HMRC and then fill out a tax self assessment for the time you are away.
The default position is they will deduct basic rate tax and then you can apply for a refund against your personal allowance through the self assessment process. To be honest Id do it that way as you know any tax liability is covered for you (you may indeed have other UK income that needs declaring, interest on savings etc) and the annual refund is a brucey bonus.
WTF? The letting agent doesn’t do this. They take their 10% and send you the balance you sort your own tax.
I have a feeling the letting agent is talking about the witholding required for a LL who is overseas. If OP wants to avoid this and handle it via Self Assessment they will have to fill out the required paperwork, otherwise the LA is required to take care of it.
Overseas landlord so yeah the letting agents will be sorting this.
Ah right 👍
Good luck getting them out when you want it back
Haven't you heard. He's gonna let it for precisely 365 days. Lol.
You are earning over 12k in the country, so you would be tax liable.
I have never heard of this.
What you would do is fill out a self assessment declaring your rental income and subtracting costs, etc.
https://www.gov.uk/tax-uk-income-live-abroad/rent
Unless OP fills out the paperwork with HMRC in advance the LA is required to handle tax when the LL is abroad for more than 6 months.
You will need a URL number and can file yourself if you £1300 income you will get taxed over normal allowance -
Also look at the renters rights bill coming in. Even if sign a year contract now it will not count you will have to serve a section 8 - 4 months before moving back so make sure estate agents is aware of all your plans.