Non-resident landlords scheme

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Non-resident landlords scheme
  • HMRC contacts
  • Non-resident landlords
  • Extent of enquiry into landlord's usual place of abode
  • Property income
  • Letting agents
  • Excluded persons
  • Chains of letting agents
  • Summary of letting agent obligations
  • Tenants
  • More...

Non-resident landlords scheme

The Non-resident Landlords Scheme (NRL Scheme) requires income tax at the basic rate to be deducted from rental payments due to non-resident landlords in respect of a UK property business and accounted for to HMRC. The NRL Scheme must typically be operated by:

  1. letting agents (regardless of the amount of rent involved), or

  2. if the landlord does not have a letting agent, tenants (paying rent of more than £100 per week (or £5,200 per year))

HMRC publishes detailed guidance notes for letting agents and tenants in relation to the operation of, and their obligations under, the NRL Scheme (Guidance Notes).

In calculating the tax, the letting agent or (in limited circumstances) the tenant may deduct certain expenses. These deductible expenses are similar to (but more limited than) the allowable expenses when computing property income.

Under the NRL Scheme, a non-resident landlord may apply to HMRC for approval to receive their UK property income without deduction of income tax (ie gross). Where the non-resident landlord meets certain conditions, HMRC will grant such approval on the basis that the non-resident landlord will self assess its UK tax liability in respect of its UK property business and file an annual UK tax return. Provided HMRC has notified a letting agent or tenant in writing of such approval, the letting agent or tenant does not have to deduct

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