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The UK landlord tax explanation

The UK landlord tax explanation

Detailed policy 1. Real estate agent / tenant tax credit Agents or tenants have the responsibility to deduct 20% of the basic tax from the rental income paid to overseas landlords and pay it to the tax office every 3 months. Without the intervention of a housing agent, the tenant must deduct 20% of the basic tax from the rent paid, and declare and deliver to the tax bureau every quarter. When calculating the basic tax base for deduction, the intermediary can deduct the corresponding reasonable expenses allowed by the tax law from the rents received. These expenses are only limited to those enumerated by the intermediary. The expenses directly paid by the overseas landlord are not in the deductible range. Inside.

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2. Application for deferred basic tax deduction -If the overseas landlord meets the following conditions, you can apply to the tax office for deferred rent basic tax deduction, and the tax office will approve the application.

UK tax affairs for overseas landlords without delay; Or never have any UK tax obligations; Or in the tax year when the application is filed, the overseas landlord predicts that there will be no UK tax liability; -If the application is successful, the tax office will send a confirmation letter to the overseas landlord or its agent (such as a real estate agent or an acting accountant).

3.Tax policy on UK rental income Overseas landlords must report their UK rental income to the tax office truthfully every tax year. Individual annual self-assessment tax returns must be reported to the tax office on time every year, and UK personal income tax is paid according to the specific income range. For the 2016-2017 tax year, if the annual income does not exceed £ 32,000, the personal income tax rate is 20%; if the annual income is between £ 32,001 to £ 150,000, the tax rate is 40%; if the annual income exceeds £ 150,000, the tax rate is 45% ; Overseas landlords can apply for the corresponding annual UK allowance based on personal income and actual country of residence, now £ 11,000; The annual rental income is calculated in a tax year (from April 6 of each year to April 5 of the following year) by subtracting accumulated costs from rent receivable. Please note that this is different from the cash calculation method of the agency or tenant. For capital expenses, deductions are not allowed in the calculation of the rental tax base, such as land purchase, house principal and house renovation costs. In addition, if the 10% wear allowance compensation method is selected in the calculation, the replacement cost of furniture or other house hardware will not be used as a deduction.

Deductible expenses -Accounting expenses

-Advertising costs

-House Handover Counting Fee

-Cleaning costs

-Rental management fee

-Local council fees

-Gardener fees

-Insurance premium

- Loan interest

-Legal and professional consulting fees

-Agency fees

-Housing management expenses

- Management fees

-Electricity, gas, water

-Local government tax

-Renovation and maintenance costs

Analysis of UK home purchase policy: Why buy UK assets? Low down payment No threshold investment globally, only 10% down payment required

Low interest rates The loan interest rate is only about 3%. Overseas buyers can borrow up to 75%, and repay after delivery

Low cost of ownership No pooled area, no property tax, one of the countries with the lowest cost of ownership of real estate in the world

High rental income The annual rental income can reach 5%, the housing market is in short supply, and it can be renamed and transferred before handing over the house.

Generations Property rights in 999, the world's real estate that will never end, inherited from the times.

Unique geographical location London is not only a British political centre but also one of the global financial centres. About 31% of the world's currency business is traded in London, making London a huge influence in the world.

Stable real estate investment market There is huge room for the appreciation of real estate in London, and house prices have increased greatly. House prices have increased by 99% in 8 years, with an average annual increase of 11%, and the value of real estate has continued to rise. Moreover, the high transparency of the London financial market makes it easier for investors to obtain mortgages.

Security The legal system is transparent, safe and rigorous, giving investors full security guarantees.

political advantage London property investment has no special visa requirements for overseas buyers.

Global giants settle in, investment prospects are bright Although the market is full of uncertainty after Brexit, in less than a month, not only Chinese-funded companies such as Wanda, Fosun, etc. have finalized a number of large investments in the UK, global giants are also focusing on London, England. The dip in investment has begun, and the value of the pound has depreciated, giving investors a very clear advantage.