Taxation: Rental Income

Lord Mackay of Clashfern Excerpts

Tuesday 3rd December 2013 Lords Chamber

[Lord Newby]

It is not true that the scheme just covers letting agents. As I said, there are two other categories of people who should pay tax in this case: one, in the case of tenants, if their non-resident landlord wishes to go that way; and the other for the non-resident landlord to register for self-assessment. Perhaps I may give the noble Lord and the House some sense of the scale of the income generated from this scheme. In 2011-12, companies that held residential property in the UK on which tax was paid paid a total of some £375 million.

[Lord Mackay of Clashfern (Con)]

My Lords, is there not scope for using the deduction-at-source method against rents? It seems to be at least as effective as any other likely way of getting money from people who are overseas.

[Lord Newby]

My Lords, that is basically how this scheme operates. A letting agent has to take some 20% of the rent and pay it over to HMRC for the non-resident landlord.