Commentary on Sections Overview Overview Section 971: Income tax due in respect of income of non-resident landlords
2971.This section enables regulations to be made about the collection of “prescribed amounts of income tax” in relation to “non-resident landlord income”. It is based on section 42A(1) to (3) of ICTA.
2972.Subsection (1) allows the Commissioners for Her Majesty’s Revenue and Customs to make regulations for the collection, assessment and recovery of “prescribed amounts of income tax” from “non-resident landlord representatives” in respect of “non-resident landlord income”. Regulation 8 of SI 1995/2902 provides that the amount is to be calculated at the basic rate of tax.
2973.Subsection (2) defines “non-resident landlord income” as income of a person whose usual place of abode is outside the United Kingdom, which is or may be chargeable to corporation tax under Schedule A or to income tax as profits of a UK property business under Chapter 3 of Part 3 of ITTOIA. This section applies regardless of whether any payment is actually made to the non-resident landlord.
2974.As the tax deducted will, in all cases, be income tax, all these regulation-making powers have been rewritten together, in this Act.
2975.Currently the regulations in SI 1995/2902 do not provide for payments to be made to the Commissioners in respect of Schedule A income (see regulations 8(3) and 9(3)). If in the future regulations were to be made, requiring amounts to be paid to the Commissioners in respect of Schedule A income, the amount paid would be a “prescribed amount of income tax” and would be capable of being set off against the non-resident landlord’s corporation tax liability by virtue of section 11(3) of ICTA.
2976.The source legislation makes reference to the charging of prescribed amounts. This reference to charging is removed to bring the rewritten version of section 42A of ICTA into line with other collection mechanisms. See Change 147 in Annex 1 and the commentary on section 963.
2977.For discussion of “usual place of abode”, see the commentary on section 874.