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Question Title: Overseas landlord
| Question: 95 |
| My client landlord is often difficult to contact. He claims to me that he is UK resident but is normally not contactable at his UK business address - they tell me that he is on an overseas trip and pass on the message. I usually get a reply back within a day or so, but again, he usually calls me from overseas. I am aware that, as agent collecting rents, I am responsible for payment of tax on rents received from all non-resident landlords (unless the landlord is approved by NRL for payment with no tax deducted). This landlord claims to be UK resident and would be very upset if I didn't believe him and deducted tax. Am I risking a claim from the Revenue if I continue to pass on rents gross - what should I do ?
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| Answer: |
| We called NRL section of the Inland Revenue for guidance on this matter. They admitted that a grey area existed where a landlord claimed to be UK resident when there is no other clear indication that the landlord is living overseas. Advice on this difficult issue is not given within the current guidance notes relating to the NRL scheme (non resident landlord). They recommended to us that, in this situation, the landlord should write to them explaining the circumstances and requesting that they assist in determining whether the landlord is non-resident. In the meantime, they would not expect the agent to deduct tax until the issue is resolved. The published guidance states: 2.11. Where letting agents have reason to believe that a landlord may have a usual place of abode outside the UK, for example where the landlord has an overseas address, they should get more information from the landlord to satisfy themselves as to the landlords usual place of abode. In cases of difficulty, letting agents can get advice from NRL section. 2.12 Where letting agents have no reason to believe that a landlord has a usual place of abode outside the UK they are not required to investigate this. In these circumstances, they do not have to operate the scheme.
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References:
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Pages:
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Hyperlinks:
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Letting Update Journal |
Jan 2000 page 27 |
letting-update-journal.html
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Letting Handbook |
Chapter 14 |
letting-handbook-and-factsheets.html
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Letting Factsheet No 26 |
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factsheet-26
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For more information, discuss on the Forum
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