If you are a non-resident landlord, the way you are taxed will depend on the Tax Treaty between the UK and the country in which you reside. If you have income arising in a country of which you are neither resident nor a citizen, that country will have the first right to tax that income. So, you may find you have to report your income to three tax authorities
If you are a non-resident landlord, the way you are taxed will depend on the Tax Treaty between the UK and the country you reside in. If you have income arising in a country of which you are neither resident nor a citizen, that country will have the first right to tax that income.
Published 11th July 2013; Updated 20th November 2024
If you are a non-resident landlord, the way you are taxed will depend on the Tax Treaty between the UK and the country in which you reside. If you have income arising in a country of which you are neither resident nor a citizen, that country will have the first right to tax that income.
A cautionary note for landlords who live away from their own countries
In some countries, the basis of taxing individuals is dependent on their citizenship (e.g. USA) while in others it is dependent on their residency.
A further complication occurs because, if you have income arising in a country of which you are neither resident nor a citizen, that country will have the first right to tax that income.
So, you may find you have to report your income to three tax authorities
Take for example a US citizen living in Spain with investment property in the UK. The income will be taxed first of all where it arises – in the UK. Then, the worldwide income of the Spanish resident individual has to be reported to the Spanish tax authority. And finally, because our landlord living in Spain is a US citizen, he or she has to report worldwide income to the IRS in the US.
Will this mean our landlord gets taxed three times?
Probably not. The arrangements between most countries set out where the income is taxed—but it still has to be reported in most countries, even if it creates no tax liability. These arrangements are contained in Tax Treaties. If our UK landlord is resident in a country with which there is no tax treaty, then full tax may be payable in both countries, and if he/she is a citizen of a third country where citizenship matters, and with which there is no tax treaty, some tax liability may arise in that country.
Landlords Tax Services deals with the UK taxation obligations of its clients, and does not act for them in connection with their obligations in other jurisdictions. If you think this situation might apply to you then you should seek local advice. Don’t get caught out!
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The information contained in this article is believed to be correct at the time of publication. The content of this article is intended to be a brief summary of the principal points of the legislation or proposed legislation only, and it is provided for general guidance only. It may not take into account subsequent changes in the law and of necessity it omits much detail. Taxation is a complicated subject and is subject to change. You should only rely on advice prepared specifically for you. Neither the writer nor Landlords Tax Services Ltd can be held liable for any loss arising from any act or omission by you as a result of your understanding of this article. If the subject matter is of interest you should contact us to see if there is a relevant update, and to take professional advice which takes into account your circumstances.