Non-Resident Landlords: Understanding the HMRC Scheme

To ensure rental income from UK property is taxed appropriately HMRC operates the Non-Resident Landlord Scheme (NRLS). This scheme is aimed at landlords who live outside the UK but receive rental income from UK properties.

Who is a Non-Resident Landlord?

If you are an individual, company, or trust that resides outside the UK and receives rental income from UK property, HMRC considers you a non-resident landlord—regardless of whether you’re a UK national or a foreign citizen.

How the Scheme Works

By default, the NRLS requires either the tenant (if rent is more than £100 per week and there's no letting agent) or the letting agent to:

• Register with HMRC using Form NRL4.

• Deduct basic rate tax from the rental payments before passing them on to the landlord.

• Pay the tax to HMRC using Form NRLQ, due within 30 days of the end of each calendar quarter (ending 30 June, 30 September, 31 December, and 31 March).

• Submit an annual return (Form NRLY) to HMRC by 5 July following the tax year, summarising rents paid and tax withheld.

• Provide the landlord with a certificate of tax deducted each year using Form NRL6.

  
  

Tax must continue to be withheld until HMRC confirms in writing that the landlord can receive gross rent payments.

Receiving Gross Rent (No Tax Deduction at Source)

Non-resident landlords can apply to receive rent without tax deducted at source by submitting the relevant form to HMRC:

• NRL1 – for individuals

• NRL2 – for companies

• NRL3 – for trusts

HMRC may approve the application if the landlord's UK tax affairs are up to date and there are no outstanding liabilities. Once approved, HMRC will notify the tenant or letting agent that gross rent payments can commence.

It’s important to note that when rent is received gross, the landlord must report the income through a UK self-assessment tax return, declaring all rental income and allowable expenses.

Speak to an Expert

If you are a non-UK resident renting out a property in the UK, this scheme applies to you. If you need assistance with registration, elections, or reporting your rental income, our team is here to help. Contact us today—we’d be happy to assist.

Authored by: London Tax Team