Insurance, Tax and Mortgage Lenders
Permission to Let
If the property is mortgaged it may be necessary to make an application for permission to let. Permission to let may be a requirement of the freeholder of apartments and landlords should check their leases. The majority of lenders have approved our contract, however should there be special requirements, we will liaise with your lender to ensure this is agreed. Please make sure the mortgage lender is informed of the intention to let prior to marketing.
It is necessary for the landlord to fully insure their property for buildings and contents cover during the period of the letting. As the owner of the property the landlord should contact their insurers to ensure that full cover is valid throughout the period of the tenancy. We can make arrangements to provide a free quotation for building and / or contents cover, which is specially formulated for rented accommodation. Acorn Lettings can handle any occurrences resulting in a claim directly with the insurer.
As part of our “Letting and Management” package we will provide a computerised monthly statement of account and autopay funds directly into a UK bank account. Our accounts department is fully computerised and is based at Acorn Lettings (Essex) Limited Head Office, Acorn house, North Station Road, Colchester Essex, Telephone 01206 762138. Rent will be paid to our landlords on the same day we receive cleared funds on the due date from the tenant.
Income Tax is payable on UK Lettings irrespective of where the landlord lives. However, through careful planning and assistance a landlord should be able to reduce their liability. Non-declaration of letting income receives harsh treatment from the Inland Revenue. We therefore advise that an accountant is employed to minimize or eliminate the tax. Expenses that can be set against tax from the letting include the following:
# Insurance, ground rent and repairs
# Legal and accountancy charges
# Some loan interest
# “wear and tear” of contents
# Unused personal allowances
# Lettings agents fees
# Annual safety checks
Non-resident Landlords Income Tax
Most property income of non-residents is subject to UK tax. The Finance Act 1995 allows overseas landlords to apply to self assess and on approval Acorn Lettings are issued with an “exemption” certificate which authorises us to pay rent without the deduction of tax. Where no certificate is available, we have a statutory obligation to implement a tax deduction before remitting the rents. This is a figure amounting to 22% of the income. Our local Tax Administrator will supply the application form and provided the applicant’s tax affairs are satisfactory, the Inland Revenue may issue the certificate. It is important that we are advised whether it is the landlord or an accountant who handles the tax affairs, in respect to the letting of the property. Please ask a member of staff about the NRL Non-Resident Landlord tax form.
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for further information
01206 762 138