UK Property Tax

Non-residents are taxed in the UK on income arising from UK sources only. You are considered tax resident in the UK if you spend at least 183 days there per year or if your main resident home is located in UK. 

will also be obliged to file a tax return detailing your worldwide income in your home (tax resident) country. Where a double taxation agreement exists between the UK and your home country, which provides for double taxation relief, then a deduction for tax paid in the foreign country can be offset against tax on the same income in your home country. A double taxation agreement exists between UK and Ireland. 

Tax on purchase:

UK Stamp Duty is levied on UK property at rates varying from 1% - 15% depending on value eg. values between £500,000 - £1,000,000 attract 4%. Values up to £125,000 are exempt. 

Ongoing property taxes:

UK Income Tax is levied on UK rents / income at rates varying between 10—50% depending on level of net income.  

Non-Resident Landlord (NRL)

Irish resident landlords are liable to UK income tax on income from properties within the UK and must file a UK Tax Return. The UK income tax year runs from 6 April to the following 5 April each year.

Non-Resident Landlords Scheme (NRLS)

The letting agent for the property, or if no agent is acting, the tenant, must deduct basic rate tax (currently 20%) at source and pay this over to the Inland Revenue. Any tax paid to the Inland Revenue on the Landlord’s behalf is held as a tax credit against the Landlord’s final tax liability. This obligation for the withholding tax is removed if the landlord registers with the Inland Revenue under the Non-Resident Landlord Scheme where, upon filing an NRL1 Form and obtaining approval, a tax exemption certificate is issued to the landlord.

The Landlord must provide the Tenant/Agent with a copy of the Inland Revenue’s exemption certificate or alternatively, a separate notice may be sent by the Inland Revenue to the letting agents or tenants named on the application form authorising them to pay rent to the non-resident landlord without deducting tax.

Note: Even though rent may be paid with no tax deducted, the rental income still remains liable to UK tax. So non-resident landlords must include it in any tax return HMRC sends them. 

Therefore, if you have submitted an NRL1 Form and you received rents gross from your tenants in the tax year 5 April to 6 April, you will have to calculate your gross rental income less your personal allowance and allowable expenses to see if you have a liability to tax in the U.K. If you have, you must submit an income tax return to Inland Revenue by 31 January following the year of assessment. 

Local UK Property tax (Council Tax) an annual Council tax is payable by the individual living in the property ie the tenant and varies depending on the location of the property.

Transfer taxes:
UK Capital Gains Tax (CGT) An Irish resident individual is exempt from UK CGT on disposal of UK investment property – therefore you will only be liable to Irish CGT at 30% on the actual gain, this is payable in Ireland (subject to the usual Irish CGT rules). 

UK Inheritance tax / Gift tax (CAT) Non UK residents are not liable to UK CAT – therefore as an Irish resident individual only Irish CAT at 30% on the actual gain is payable in Ireland – this is subject to usual Irish thresholds i.e. if the gift/inheritance is below a certain amount no tax will be payable.

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