If you live abroad and let out a UK property, the Non-Resident Landlord Scheme means your letting agent or tenant must deduct basic-rate tax, currently 20%, from your rent and pay it to HMRC, unless you apply to HMRC on form NRL1 to receive your rent gross and settle the tax yourself through Self Assessment. Here is how it works, and how we handle it for you.
What the scheme is
The Non-Resident Landlord Scheme has run since 1996. It applies where a landlord's usual place of abode is outside the UK, which generally means living abroad for six months or more. It exists so that tax on UK rental income is collected even when the owner lives overseas.
The default: tax is deducted from your rent
Unless you are approved otherwise, the party that pays you must operate the scheme. If you use a letting agent, the agent deducts basic-rate tax, currently 20%, from the rent after allowable expenses, and pays it to HMRC each quarter. If there is no agent, the tenant must deduct it, but only where the rent is more than 100 pounds a week.
Getting paid gross: the NRL1 form
You can apply to be paid your rent in full, with no tax taken at source, using form NRL1 for individuals. If your UK tax affairs are in order, HMRC approves the application and notifies your agent or tenant to pay you gross from a set date. Importantly, this does not remove the tax. It simply moves it: you report the income and pay any tax due through Self Assessment instead.
What your managing agent does
An agent operating the scheme keeps records, deducts and pays the tax quarterly where required, files an annual information return to HMRC, and gives you an annual certificate of the tax deducted, which you use in your own return. Choosing an agent who runs this properly is part of staying compliant from abroad.
How we handle it
As your managing agent we account for the scheme correctly, coordinate with you on the NRL1 application where that is the right route, and give you clean records at year end. The aim is simple: your UK rent handled properly while you are not in the country, with nothing falling through the cracks.
This guide is general information, not tax advice. The rules and rates can change. Check the current position on GOV.UK and take your own professional advice for your circumstances.
Common questions
What is the Non-Resident Landlord Scheme?
It is HMRC's system for taxing rent from UK property where the landlord's usual home is outside the UK. By default the letting agent, or the tenant if there is no agent, must deduct basic-rate tax from the rent and pay it to HMRC, unless the landlord is approved to receive rent gross.
How much tax is withheld from my rent?
The default deduction is basic-rate tax, currently 20%, taken from your rent after allowable expenses. Where there is no agent, a tenant must operate the scheme only if the rent is more than 100 pounds a week.
How do I get my rent paid without tax deducted?
You apply to HMRC on form NRL1 (individuals). If your UK tax affairs are in order, HMRC approves you to receive rent gross and notifies your agent or tenant. You still pay any tax due, but through Self Assessment rather than at source.
Do I still pay UK tax if I am approved to receive rent gross?
Yes. Approval only changes when the tax is collected, not whether it is due. You report the rental income and pay any tax through Self Assessment instead of having it deducted from each payment.
We handle the Non-Resident Landlord Scheme as part of managing your property, so your UK rent is dealt with properly while you are abroad. Let us take it off your plate.
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