1. Informing HMRC

• If your total rental income (before expenses) is over £1,000 per year, you must report it to HMRC.

• If your total profit (income minus expenses) is over the personal allowance (£12,570 for 2024/25), you’ll have to pay income tax.

• You must register for Self Assessment if you haven’t already.

  • Deadline: 5th October following the end of the tax year in which you started renting.

How to register:

• Online via HMRC’s website

• Call HMRC if unsure.

2. Tax Calculation

• Income Tax Bands (2024/25)

  • Basic rate (20%): £12,571 – £50,270

  • Higher rate (40%): £50,271 – £125,140

  • Additional rate (45%): £125,141+

• You can deduct allowable expenses before tax, such as:

  • Letting agent fees

  • Maintenance and repairs (not improvements)

  • Insurance

  • Mortgage interest (you can claim a 20% tax credit instead of full relief)

3. If You’re Living Abroad (Non-Resident Landlord Scheme)

• If you live abroad for more than 6 months, HMRC considers you a non-resident landlord.

• Your letting agent or tenant must deduct basic rate tax (20%) from your rental income before paying you unless you apply for an exemption. 

• You can apply to receive rent without tax deducted using form NRL1 via HMRC. Click here for more info.  Plan well in advance if applying for this, although you can only apply 3 months in advance,  I only received approval and confirmation a couple of weeks before I actual retired abroad, left the country and started receiving rent.

4. Filing a Tax Return

• The tax year runs 6 April – 5 April.

• Self Assessment deadline:

  • 31 October (paper)

  • 31 January (online)

• Pay any tax owed by 31 January the following year.

Here are some very basic steps on how to complete an online Self Assessment tax return while living abroad, what you need to know. Again I am not an accountant and please seek independent financial advice, but again this Blog is to get you thinking of the sort of things you need to start planning and have in place when retiring abroad:

1. Filing Online from Abroad

• You can file your Self Assessment tax return through the HMRC website using your Government Gateway account.

• If you haven’t registered yet, you may need to request an activation code, which HMRC sends by post (this could take longer if you're overseas).

• You’ll need to enter your foreign address in the "Personal Details" section of your return.

2. Key Considerations for Non-Residents

• Non-Resident Landlord Scheme (NRLS): If your rental income is subject to this, declare it on your tax return.

• Taxable UK Income Only: As a non-resident, you only pay tax on UK income, such as rental earnings.

• Personal Allowance: If you’re a UK citizen, you should still be entitled to the tax-free personal allowance (£12,570 for 2024/25).

• Foreign Taxation: If you're also paying tax in Vietnam, check if a Double Taxation Agreement (DTA) applies to avoid being taxed twice.

3. Deadlines & Payment

• 31 January: Deadline for online filing and paying any tax due.

• 31 July: If required, make the second payment on account for the next tax year.

• Bank Transfer from Abroad: If paying from an overseas bank, use HMRC’s international bank details to ensure payments go through smoothly.

This is a very simple guide to the things you need to do if you decide to retire abroad regarding property income.  This was another area I researched and pulled information together when I was planning to take that big decision to retire abroad, that I thought I would share.