Crown Home Buying & Letting is here to guide you on the two essential numbers you need as an overseas landlord: UTR (Unique Tax Reference) and NRL (Non-resident Landlord).
Before officially becoming a landlord, you need to apply for two tax-related ID numbers simultaneously: UTR and NRL.
The UTR, also known simply as a "tax reference," is a 10-digit serial number required for filing taxes each year. Once your application is approved, the UK tax office will mail this tax number to the resident address you provided. It is important to keep this document safe and provide it to your accountant when you file your taxes annually.
The NRL number is crucial because, without it, the letting agent will not be able to receive the certificate letter from the UK tax office in time. Consequently, before the agent transfers the first rent to you, they must deduct 20% of your rent as withholding tax according to British tax law and pay it to the tax office quarterly. The NRL number is required for landlords who reside in the UK for less than 183 days per year.
Without an NRL number, you will pay an additional portion of withholding tax. While you can apply for a refund of this tax through your accountant when you file your tax return at the end of the year, it can be time-consuming.
It's simple! Prepare ahead and apply early.
The application period for an overseas landlord registration number is about 4-6 weeks. Therefore, British Crown Real Estate recommends finding an intermediary three months before you hand over the house to allow sufficient time to apply in advance.
The specific fee depends on the situation. Usually, the intermediary charges separately for this service; however, our staff assists our landlords with the application for free.
Filling out the NRL form mainly involves the following personal information: personal name, long-term residential address, rental property information in the UK, and your intermediary information (NA number).
Only qualified intermediaries registered with the British Inland Revenue Department have an NA number and are eligible to prepay taxes for the Inland Revenue Department. Therefore, you must ask your agency for their NA number in advance.
If you prefer to apply yourself, you can refer to our video, "How to Apply for NRL," from Crown Home Buying & Letting, for a quick start to understanding the application process.
Landlords should also be reminded that if the intermediary has deducted your tax in advance, you must ask the agency for a tax payment certificate (NRL6 certificate) by 5th July each year and pass this information to your accountant to file your taxes accurately.
We hope this article is helpful. If you have a property in London and are looking for a reliable and professional agency to help you rent it out, please contact us. Based in London, we provide buying, selling, and letting management services.
References: UK tax official website: Find your UTR number
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