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The Non-Resident Landlord Scheme. It's worth knowing...

28th Nov 2016

Category: Property advice


We look briefly at what needs to be done, and who is classed as non-resident.

We are often asked about the implications of Landlords spending time overseas and what that means for their taxes. It is not unusual for people to have temporary work placements or postings that see them spend some time overseas, so we explore briefly the tax implications.

Many landlords don't even consider that there may be tax implications on them if they have a placement overseas (especially if it is not permanent or when they continue to be paid into U.K. bank accounts). However, there are some considerations that are worth noting for anyone spending time abroad.

What is the Non-Resident Landlord Scheme?

Essentially, HMRC wants to know that appropriate tax is being paid any income earned by the renting of property in the UK. It does this by placing the burden of collecting tax on the Agent or Tenant unless the Landlord has been given exemption to receive the gross rent receipts. Fair enough.

Who is effected?

If you live abroad for 6 months or more per year, you’re classed as a ‘non-resident landlord’ by HM Revenue and Customs- even if you’re a UK resident for tax purposes.

How to pay your tax?

You can get your rent either:

  • in full and pay tax through Self Assessment - HMRC allows you to do this
  • with tax already deducted by your letting agent or tenant

Getting your Rent in Full

If you want to pay tax on your rental income through HMRC.

If your application is approved, HMRC will tell your letting agent or tenant not to deduct tax from your rent and you’ll need to declare your income in your Self Assessment tax return.

HMRC will not approve your application if your taxes aren’t up to date, eg you’re late with your tax returns or payments.

Getting your rent with tax deducted

Your letting agent or tenant will:

  • deduct basic rate tax from your rent (after allowing for any expenses they’ve paid)
  • give you a certificate at the end of the tax year saying how much tax they’ve deducted

If you don’t have a letting agent and your tenant pays you more than £100 a week in rent, they’ll deduct the tax from their rent payments to you.

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What should I do if I want to be paid my rent in full?

You'll need to complete an NRL1i form, details of which can be found here:


For other tax matters make sure you speak to someone who is qualified to offer advice like an accountant.  For more information about renting property, even if you are going overseas, why not call one of our ARLA trained Portfolio Managers.

Tom Kite

Comfort Partner

An experienced Nottingham Property Specialist and a Founding Partner of Comfort Lettings.

Connect with me on Linkedin



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