Setting Up Non-Resident Landlord Tax Functionality (UK Only)

This guide will assist you in configuring your Client Account within Re-Leased to manage Non-Resident Landlord tax matters effectively. It is designed to ensure that you can automatically withhold tax where necessary and handle the financial transactions with HM Revenue & Customs (HMRC). By following these steps, you can ensure compliance with UK taxation regulations for non-resident landlords.

Initial Setup for Non-Resident Landlord Tax

1. Go to your Client Account Settings and enable the option to Withhold tax for non-resident owners. By doing so, income and expense Chart of Accounts will default to withholding tax. Also, set your financial year end to March.
   
   
   
   
2. Create a new Chart of Accounts for any income or expenses that should not have tax withheld (like Service Charge Income) and set the Non-Resident Income Taxable/Deductible slider to NO. Remember, this must be done when creating the account as it can't be changed later.
   
   
3. Establish an account for HMRC payments, ensuring that the Non-Resident Income Taxable/Deductible slider is also set to NO.
4. Add HMRC as a new contact, labeling it as a Company under Contact Category.
5. Set up a Disbursement Profile with the option for Non-Resident Withholding Tax Disbursement to manage tax payments to HMRC.
   
   

Configuring Landlord and Property Details

1. After adding a landlord as an owner and setting up their properties, navigate to the landlord's record and choose Non-Resident Tax from the menu.
2. Select the Flag as Non Resident button and fill in the details:
   • Enter the start date from when they became a non-resident.
   • Leave the end date blank if they're still non-resident or enter it if they have returned to being a UK resident.
   • If the owner is not VAT registered, ensure that the appropriate option is deselected.
   • If the owner has an exemption, check the corresponding box and enter all relevant details, including the Exemption Approval Date and Approval Reference Number.
3. Should you need to account for already withheld tax in the system, select Set Opening Balance and enter the required details to reflect the net income and tax retained.

Finalizing the Setup Process

After you've completed the setup, the system will automatically handle the steps necessary for withholding Non-Resident Landlord tax and remitting it to HMRC. When it's time to disburse the retained tax to HMRC, simply process the payment using the established Disbursement Profile.

It’s imperative that the details for non-resident landlords, including exemption information and financial transactions, are accurate to comply with UK tax requirements. The setup process is as vital as the ongoing management, ensuring that both you and your landlords remain on the right side of tax laws.