Non-Resident Landlords

The Non-resident Landlords Scheme is a system for taxing the UK rental income, of those who have a usual place of abode outside the UK. UK lettings agents are required to deduct basic rate tax from the rental income of Landlords who live outside the UK and to calculate and pay this tax, each quarter, to the Inland Revenue Accounts Office.

The Revenue regards those who are absent from the UK for 6 months or more as having an abode outside of the UK, which means that a person can be a UK resident, and still be a Non-resident Landlord.

Landlords living abroad or planning to move abroad, can apply to receive their rent with no tax deducted by completing the NRL1 form, which is available by phoning 0151 4726208/9 or at: http://www.hmrc.gov.uk/cnr/nrl1.pdf. However, although the agent may not need to deduct the tax, the income still remains liable to UK tax and must therefore be included in the Landlords Tax Return.

Property expenses may be deducted prior to calculating the amount of tax to deduct, but letting agents must deduct basic rate tax, unless the Inland Revenue has told them not to do so.

Martina Mason-Green