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How to file the tax return for the Overseas property owners

Property prices in the UK are cheaper than those in Hong Kong. In addition, the local rental market is booming, and property rental returns are generally higher than those in Hong Kong. In recent years, many Hong Kong people have purchased properties in the UK for investment purposes. According to Hong Kong social media reports, since February last year In January this year, 25,000 properties in England and Wales were owned by Hong Kong residents, the largest number among all foreign owners. Of course, there are many Hong Kong residents collecting rent as "overseas owners". With the start of the new tax year, some overseas property owners are gradually confused about the tax declaration. The main reason is that they have made a mistake in the direction of tax declaration. This time, I will talk to you about the tax declaration of overseas property owners collecting rent for British properties.

 

Do overseas owners have to declare taxes to the British government?


Of course, whether you are a British resident or an overseas owner still living in Hong Kong, you have to file a tax return with HMRC (HM Revenue and Customs) every tax year. If you fail to file a tax return before the deadline, you will face a penalty, and the interest will be calculated on a daily basis, so it cannot be ignored.

 

Overseas owners cannot use HMRC online tax filing service


For overseas owners who have filed tax returns for the first year, it may be quite difficult to complete the Self Assessment, because many overseas owners only found out when they filed their taxes that it is impossible to file tax returns through the HMRC online service in Hong Kong. Download the paper form and fill it out and send it to HMRC. You will find that there are many kinds of SA paper forms. It is naturally very difficult to figure out which one to fill out. In addition, HMRC has removed the SA100 paper form, which makes many overseas owners in the process of tax declaration. on, feeling helpless.

 

Can I file my own taxes with tax software?


There are many tax filing software in the market. Taxpayers can use these software to assist in tax filing as long as they spend a certain amount of money. Using software to file tax returns does have certain benefits, because they generally have an automatic "error detection" function. If taxpayers fill in omissions or make mistakes The information will require the taxpayer to fill in again, which will effectively reduce the chance of making mistakes compared to the paper-based tax form. However, the tax system in the UK is complicated, and there are few general tax reporting software websites that provide detailed teaching on tax declaration for overseas owners. Miss or check all the forms, it's back to the same problem with paper taxes.

 

Tax declaration process for overseas owners

Since the overseas owner is not a tax resident, before filing a tax return, it is actually necessary to register for the NRLS (Non-Resident Scheme), which is the non-resident landlord plan, and then pay the required tax through the tenant or the property management company. If you want to pay tax directly overseas, you need to apply separately. In terms of tax rates, depending on the situation of overseas owners, the tax bands payable are also different, and it is difficult to generalize. Therefore, the safest way is to complete the NRLS registration through a licensed accountant in the UK to ensure that all procedures and submitted information are legal and compliant. In addition, the accountant can also help you find items that are suitable for tax credits, such as property maintenance and management fees Etc. to reduce tax expenses.

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