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Tax Guide

Accountancy Information

NOPS offer a wealth of experience when it comes to considering prudent income tax strategies to maximise the profitability of your property portfolio. Obviously, we always recommend that you consult your own specialist tax accountant, however, the following guidance is provided for your convenience. NOPS can also refer you to a reputable and experienced tax accountant should you require this service.

Income Tax

As is the case with income and interest on savings, your income from property letting is also subject to tax. Fortunately, the majority of costs arising from your lettings activity can be deducted allowing you to significantly reduce your tax liability.

These deductible items include:
  • Agents fees
  • Buildings Insurance
  • Maintenance fees
  • Service charges for leasehold properties
  • Direct costs associated with letting your property
  • Wear & tear allowance (only applicable if your property is furnished) – amounting to 10% of the gross rent or alternatively a “Renewals allowance” for replacing equipment and furniture
  • Repairs – you can deduct costs of repair but not where you improve the property

Of course to take advantage of these deductions you need to be meticulous about keeping receipts as proof of expenditure, noting that in the case of joint ownership, the proportion of rental income equals the proportion of your ownership of the property.

Non-Resident Landlord Tax

A significant proportion of NOPS Clients are non-resident, it is important that, if you fall into this category, you have the right guidance. Speak to our Managing Director Debbie Swailes who will be able to guide you in this crucial aspect of portfolio management.

HMRC define non-residents as:
  • You left the UK to live abroad on a permanent basis
  • You have been absent from the UK and your full-time work lasts for a whole tax year or more
  • Your visits to the UK are less than 183 days in a tax year and on average you spend, less than 91 days in the UK over a maximum period of four consecutive year

In cases where you have not registered for “Non-Resident Landlord Tax Exemption” we are obliged to deduct 20% from the gross rent amount (Which is the income with the allowable expenses deducted) and pay you the remaining net amount. Thereafter we send the tax to the HMRC. As you would expect, we strictly adhere to HMRC rules and tax legislation and NOPS activities are thoroughly audited to ensure legal and best practice compliance.

Many NOPS non-resident Landlords do, therefore, complete forms NRL 1 for individuals, NRL 2 for companies and NRL3 for trustees for the purpose of gaining exemption from HMRC. In these cases we can pay the Landlord all the rent directly without deducting the tax. For more information please contact our Managing Director Debbie Swailes. NOPS provide Non-Resident Landlord clients a statement by 5th July which itemises rent paid together with tax deducted for the previous financial tax year ending 31st March.

We do advise that you seek professional advice from your own accountant regarding your personal tax affairs.

To discuss any of these issue, in the first instance, please call Debbie Swailes on 01865 311745.