How To Avoid Paying Tax On Rental Income
Learn what ATED is, how it’s calculated, exemptions, and why professional advice is vital for
When renting out a residential property, the landlord has the responsibility of checking that their tenants have the ‘right to rent’ in the UK. A tenant has the right to rent a property here if they are a UK citizen, someone with lawful immigrant status, or other permission to reside in this country like a visa. This is a legal responsibility of the landlord, and not doing a Right to Rent check can result in penalties – read on to find out more about Right to Rent checks, including how to do them, what kind of proof is required, and more.
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ToggleA Right to Rent check is something a landlord must do before agreeing to let their property to tenants, regardless of whether they are named in the tenancy agreement. Since February 2016, it has been mandatory as per the Immigration Act of 2014 for landlords to prove that their tenants have the legal right to rent a residential property under the Right to Rent Scheme. The Immigration Act 2016 also makes it a criminal offence for a landlord to knowingly rent a property to someone who is disqualified from renting a property. Proof of a tenant’s Right to Rent can be a form of ID that proves their British or Irish citizenship, a share code for citizens of the European Economic Area (EEAA), and for those from outside of the EEA, permission from the UK Home Office to reside in the UK.
No – people under the age of 18 are exempt from the Right to Rent Scheme, so you do not need to check tenants’ children as long as you have proof they are under 18 when the tenancy starts. If they turn 18 during the tenancy agreement you are not obliged to do a Right to Rent check at this time, but where follow-up checks are needed for existing tenants, those over 18 should be included.
Landlords should ask all prospective tenants to provide their ID, which could be a passport, driving licence or other form of official ID that states their nationality. If the tenant is a British citizen according to their ID, then the landlord should make a copy of their ID and store it securely according to UK data protection laws. No further checks are needed at this point.
For tenants who are not British or Irish citizens, the landlord should request their share code. This is a personal identifier that can prove someone’s immigration status. Tenants who need to provide a share code can obtain one from the HMRC website using their UKVI (UK Visas and Immigration) account, which they will already have if they have a visa or other permission to reside in the UK. Much like the ID for British citizens, the landlord should retain proof of their tenant’s right to rent securely and keep it for one year after the tenancy ends.
All prospective tenants should be subject to the Right to Rent check, even if the landlord believes they are British citizens. Landlords cannot only check the status of those they believe not to be British or make any assumptions about a person’s right to rent based on their accent, nationality, or colour – this could amount to discrimination under the Equality Act 2010 and may result in a discrimination claim in court.
Proof of identity will be required for all tenants for a right to rent check regardless of their citizen status. You need to be sure that the tenant is who they say they are and producing a form of ID like a passport, driving licence or birth certificate is a good way to do this. As mentioned previously, tenants who are not British or Irish citizens will have to provide a share code as proof of their right to rent in the UK. Passports may also contain visas that detail the tenant’s immigration status, especially if they are here temporarily, e.g. for a work contract.
A share code is a 9-digit code issued by the Home Office that people who have moved to the UK will need as proof of their right to work and rent property in the UK. They can apply for their share code online using their passport, national identity code, biometric residence card, or permit. A share code expires after 90 days from its date of issue – if another one is needed after the expiry date, the person can apply again. Once the prospective tenant has provided their share code and their date of birth, the landlord can use the Right to Rent checker on the government’s website to check their status.
There are exceptions where some tenants are not subject to right to rent checks – see the list below for all exceptions to the Right to Rent Scheme.
Legally, a landlord cannot rent to a tenant who has failed the right to rent check. If they discover that a tenant they already rent to does not pass the right to rent check, or that a potential tenant does not have the right to rent in the UK, they must inform the Home Office using this form.
Note: Landlords are not expected to become detectives – if a tenant has provided legitimate-looking documents and the landlord has verified them to the best of their abilities, this will suffice for the right to rent check.
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