Tax on property and rental income Living abroad
If you choose to let out your UK home while you live abroad, you pay income tax on the rent in the normal way – see How rental income is taxed. But there are special rules about how you pay the tax.
How you pay your tax
Your letting agent or tenant must deduct tax from your rental profits at the basic-rate (20% currently) each quarter and pay it to HMRC (though tenants who pay rent that's less than £100 a week don’t have to do this unless HMRC asks them to). You can then set off the tax paid against your tax bill when you complete your tax return.
Alternatively, you can apply to HMRC for approval to receive your rental profits with no tax deducted. In return, HMRC will ask you to complete a self-assessment tax return once a year to work out whether any tax is due.
- Tax query? Speak to our experts on the Which? Money Helpline
- Take a look at our full guide to buying property abroad
- Want to save money in your home? Take a look at our guide to saving on heating