UK NON RESIDENCY

I understand that one pays tax on a pension,but earned income and interest on UK building society investments is paid gross by completing an R85 form. How does one go on when renting out a property. Do you pay the VAT and reclaim it or ask for an exemption? How does the Renting company handle the transfer of income?

I understand some benefits are lost including medical services but does anyone have experience of being a "UK non resident" and lived. ( with the taxman)

Naam Jai, My understanding is that because the income is generated/earned in the Uk and you are a British National (i.e born in the Uk of UK parents) then you are taxed on it. That is exactly what applies to me on my UK Occupational pension. Any income you "earn" in the Uk will still be subject to Uk tax, and that includes income from Uk property lettings.

Re property letting in the UK - Under current UK tax legislation, if you use a property Letting Agent, they are required to deduct tax from your rental income, unless they have received dispensation from the Revenue (HMRC) not to, and they will only get that if you have contacted the Revenue and agreed you will submit Accounts etc and pay tax at the year end.

If you choose not to use a letting Agent, the Tenant is now legally obligated to deduct tax from the rent before paying it over to you. I have recently investigated this at length and decided it wasn't worth the hassle. I can give you the Revenue's weblink, if you wish.

The advantage in being declared "Non UK Resident for tax Purposes" is that any income that you earn overseas and hold overseas is not subject to Uk tax.

The R85 Form is for UK Residents to declare that they are not subject to tax, because for example their income is below their personal tax allowances. If you are "Non-Resident for UK tax purposes, the form is an R105.

You are correct in that officially you lose your Nat Ins medical benefits if you reside outside of the UK. Though I don't think that is necessarily such an issue. If you can quote your GP's name to the hospital, you will receive free medical treatment (under the NHS) and if you are still registered with a GP, you can see him free under the NHS.

These should help, particularly the last one if you are planning to let property in the Uk whilst residing abroad:-

http://www.hmrc.gov.uk/cnr/

http://www.hmrc.gov.uk/cnr/nr_landlords.htm

Arjay

Well done and thanks for the info.
Being Non Resident completing the R 105 beats having the tax deducted at source though and not being able to claim the expenses back for two years. Heres to keeping account of every penny spent. I presume becoming a landlord would be self employment.

Thinking about registering as being a UK non resident, (which I am and have been for two years,) is a difficult decision. One loses the 200pound fuel allowance? As a landlord I can claim a business and send in returns instead of having tax deducted at source and claiming expenses later, such as they are.I am to get my state pension soon and that would be frozen at the rate received initially?

Arjay explains the main purpose that is income from investments etc earned overseas is not liable to UK tax.