UK taxman hits out at tax-evading expat landlords

Published:  23 Jul at 6 PM
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Expats who own or have recently sold a buy-to-let property in the UK without paying the tax due are being urged by HMRC to regularize their tax affairs or face the consequences.

The UK Tax Office is is coordinating efforts to locate private landlords living overseas who have not declared rental income or the sale of a buy-to-let property. Tax cheats in the sector are being targeted by 40 specialist task forces, giving cause for concern amongst expats who’ve recently purchased UK buy-to-let properties as an investment against a future return home.

Recently in Yorkshire, a round dozen expat landlords were investigated for tax evasion, and the South-East task force established late last year is expecting to recover at least £4 million in unpaid taxes from landlords. Investors have until 6 September to declare and pay tax on rental income or the sale of a second home.

It seems HMRC is now seeing private landlords, wherever in the world they live, as a convenient source of tax revenue. The number of Britons with buy-to-let investments has increased considerably since 2009, and is now standing at around two million.

Tax accountants are concerned that expats who have lived abroad for some time may not understand the new reporting obligations, nor the fact that their liabilities may be negligible when income is set against allowable expenses. If letting through an agent, for example, the Non-Resident Landlord Scheme will have compelled the agent to deduct basic rate tax at 20 per cent before remitting rentals to the overseas landlord.
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