What are the implications of real estate agents withholding income tax at source?

Real Estate Agents, managing properties of non resident landlords are required to withhold income tax at source. They act as tax collectors for the government.

When they do this, most agents will withhold 20% of the net rental (income less their fees and any other expense they have paid for on the landlord’s behalf).

Other expenses like mortgage or loan interest are not taken into account. Using this method, the landlord generally pays more tax, as not all allowable expenses are taken into account.

All our non resident clients apply to receive their rents without tax deducted by completing a Form – NRL1. When this application is approved, the clients are issued (by HMRC) a Unique Tax Reference (UTR) and they are required to file a self-assessment tax return every year.