2023-05-22Introduction to Taxes for UK Properties
|
|
Tax band
(England/Wales/Northern Ireland)
|
Taxable income |
Income tax rate |
Personal allowance |
Up to £12,570 |
0% |
Basic rate |
£12,571–50,270 |
20% |
Higher rate |
£50,271–150,000 |
40% |
Additional rate |
£150,001+ |
45% |
Financial Year |
2020/21 |
2021/22 |
2022/23 |
2023/24 |
Main rate |
19% |
19% |
19% |
25% |
Small profits rate |
n/a |
n/a |
n/a |
19% |
Lower threshold |
n/a |
n/a |
n/a |
£50,000 |
Upper threshold |
n/a |
n/a |
n/a |
£250,000 |
Dividend tax band |
2021-22 |
2022-23 |
Basic rate |
7.5% |
8.75% |
Higher rate |
32.5% |
33.75% |
Additional rate |
38.1% |
39.35% |
Tax Band |
Residential Properties |
Properties other than Residential |
Companies selling Properties |
Basic rate |
18% |
10% |
Corporation Tax correlated to the tax rate charged |
Higher rate |
28% |
20% |
|
Additional rate |
28% |
20% |
(1) |
Non-resident Landlord Scheme (NRLS) If a landlord abodes outside the UK, his letting agent or tenants should operate the Non-resident Landlord Scheme (NRLS). They must use the Scheme to deduct tax from the landlord’s UK rental income and pay the tax to HMRC, unless HMRC has told them in writing that the landlord is approved to receive the rental income with no tax deducted. The scheme requires UK letting agents to deduct basic rate tax (currently 20%) on any rental income they collect on behalf of non-resident landlords and pay this tax over to HMRC on a quarterly basis. Non-resident landlords can offset any tax deducted under the NRLS against their tax liability when they complete and file their UK Tax Return. Letting agents of a non-resident landlord must use the Scheme regardless of the amount of the rent collected and deduct tax from the landlord’s UK rental income and pay the tax to HMRC, but for a tenant who pays rent of £100 a week or less, do not have to deduct the tax before paying the rent to landlord. Non-resident landlords can apply to HMRC for approval to receive rental income with no tax deducted. HMRC will give approval and register the landlord for self-assessment if their UK tax affairs are up to date or either they have never had any UK tax obligations, or they do not expect to be liable for UK tax for the year in which the application is made. |
(2) |
Capital Gains Tax
|