Setting up an overseas landlord

Non-resident landlords are persons who have UK rental income and whose usual place of abode is outside the UK, including individuals, companies and trustees. In the case of individuals, HMRC normally regard an absence from the UK of six months or more.

Partnerships are treated as a separate landlord for their share of the rental income.
For more information on Removing or changing the ownership of a property, click here

VAT registered individuals, company or trustees can be selected accordingly to account for the amount of NRL tax being deducted.  

This article includes: 

• Setting up an overseas landlord
• Adding the tax balance for any tax held

Setting up an overseas landlord

To set up an overseas landlord, including their tax settings:

1. Click Contacts on the main toolbar
2. Select the relevant landlord from Recent & Favourite Contacts
   1. Alternatively, find the landlord using the Search Contacts bar in the top right
3. Click Contact on the side menu
4. Click the Tax top tab
   1. Select No if an overseas landlord isn't VAT Registered
   2. If the VAT Registered field is set as Unknown, Alto assumes that the landlord is VAT registered and overseas tax will be calculated differently than if No was selected
5. Click Add Overseas Period
6. Enter the Overseas From and To dates
   1. If there is no end date, tick Ongoing
7. Enter an Exemption Certificate Number
8. If you don't have one, deduct 20% tax in the NRL Tax field
9. Click Add
   
   

   

VAT on overseas landlords

1. Select the correct option for the landlords VAT status in the Tax top tab.

• Unknown - Not known if VAT registered
  • HMRC - As per the HMRC regulations, if the agent doesn't know for certain the VAT status of a landlord, the status ‘Unknown’ should be used. This status automatically deducts NRL Tax from the VAT portion of any income but does not credit NRL Tax against the VAT portion of any
    expenses
  • Alto will deduct the maximum NRL tax possible. The landlord will not receive a tax credit on the VAT element of expenses, and if the rental charge contains VAT, the landlord will be taxed on the gross rent rather than the net rent
• Yes - VAT registered
  • HMRC - As per the HMRC regulations, VAT Registered - No NRL Tax should be applied to the VAT portion of any receipts or expenses. This is because the landlord will already be accountable to the Inland Revenue for these VAT amounts and any deductions/credits which would cause a
    duplication of charges/refunds
  • Alto will deduct the maximum amount of tax possible. For example, if there was a fee or expense of £200 + £40 = £240, the tax credit would only apply to the expense part which is £200, as the VAT element of £40 could be reclaimed elsewhere, i.e. £40
• No - Not VAT registered
  • HMRC - As per the HMRC regulations, NRL Tax must be debited from the VAT portion of any receipts, and must be credited on the VAT portion of any expenses
  • Not VAT Registered - NRL Tax must be debited from the VAT portion of any receipts, and
    must be credited on the VAT portion of any expenses. If the landlord is set as No to being not registered for VAT, the landlord would receive the tax credit on the full £240 expense, i.e. £48

Adding the tax balance for any tax held

To add the tax balance for any tax held:

1. Click Contacts on the main toolbar
2. Select the relevant landlord from Recent & Favourite Contacts
   1. Alternatively, find the landlord using the Search Contacts bar in the top right
3. Click Actions
4. Click Charge
5. Click Add Charge
6. The Add Charge for... window opens. Enter the Charge Date
7. Select the Frequency as Single
8. Select Charge To as Landlord
9. Select the Charge Item as Overseas Tax, then tick Overseas Tax
10. Enter the Net Amount of the tax balance held for this landlord
11. Click OK
12. Tick Raise Now
13. Click Raise Selected and on the next window Raise Selected
14. Click Close
15. Click Actions
16. Click Receipt
17. The Receive From window opens. Enter the Receipt Date
18. In the dropdown menu, click the Receipt Type
19. Enter a Bank Reference (if required)
20. Using the Receive into Bank Account dropdown menu, click the bank account the money was receipted into
21. Enter the total Amount Received
22. Click Update