Non-UK Resident Landlord Scheme

Date Published 11 February 2019

What is the Non-Resident Landlords Scheme?

The Non-Resident Landlords (NRL) scheme is a structure intended to tax the rental income of people who do not usually live within the United Kingdom, but are renting UK property which they have purchased.

What is a `non-resident`?

Anybody who spends more than 6 months of the year living in another country is counted as a `non-resident` and may be subject to the scheme.
Taxation Year
For the purposes of the NRL Scheme, the year runs from 1 April to the following 31 March. Letting agents and tenants who have to operate the Scheme must account for tax each quarter - that is, for the three-month periods ending on 30 June, 30 September, 31 December and 31 March.

Who is responsible?

If you are renting your UK property and are a non-resident then either the tenant or the letting agency will have to operate the NRL scheme; essentially, this means deducting basic rate tax (20%) from your rental income before the rent is paid on to the landlord. This, in turn, can be offset against your own UK tax bill at the end of the year.
Letting agents are required to deduct the tax they collect for non-resident landlords, and if the property isn`t let through UK letting agents then it is the tenants` responsibility to deduct the tax (if rent is more than £100 per week).

No tax required in the case of;

Non-resident landlords can apply at any time for approval to receive their rental income with no tax deduction if;

• their UK tax affairs are up to date; or
• they have never had any UK tax obligations; or
• they do not expect to be liable to UK tax for the year in which the application is made.

Looking for more information?

Non-resident landlord forms: https://www.gov.uk/government/collections/non-resident-landlords-forms
Non-resident landlord scheme guidance: http://www.legislation.gov.uk/uksi/1995/2902/contents/made
Tax on your UK income if you live abroad: https://www.gov.uk/tax-uk-income-live-abroad/rent
Paying tax on rent to landlords abroad: https://www.gov.uk/guidance/paying-tax-on-rent-to-landlords-abroad