Under the Non-Resident Landlord (NRL) scheme, non-UK resident landlords have tax on their UK rentals collected by their UK letting agent or tenant. They can apply to HMRC to receive rent gross.
Subscribers see Non-Resident Landlord scheme
This is a freeview 'At a glance' guide to the Non-Resident Landlord scheme.
At a glance
The default position is that the agent or tenant is required to deduct basic rate tax from rental income before it is passed on to the non-resident landlord.
- Tax and rents are reported annually to HMRC on the NRL scheme annual return.
- The form is completed even if no tax is deducted.
- It must be filed by 5 July following the end of the tax year.
- The agent or tenant provides the NRL with an annual tax certificate by 5 July each year.
- Tenants do not have to operate the scheme if they pay rent of £100 or less per week unless HMRC requests them to do so.
- The annual return form is available online.
NRLs may apply to HMRC to have their income paid gross if they are not liable to UK tax, are up to date with their tax affairs or have never had any UK tax obligations.
Recent changes
Change to Corporation Tax
Since 6 April 2020, non-resident company landlords have been charged to Corporation Tax (CT) instead of Income Tax on their UK property income.
- The corporate interest and loss rules are applied in the same way to UK and non-UK resident companies.
- Non-resident companies are required to register for CT and prepare and file CT returns and accounts accordingly.
- There are transitional rules to ensure that no profits fall out of account or are doubly taxed and to deal with losses.
A non-resident company will not be required to register for CT and file a CT return for an accounting period if:
- Its liability to CT is fully offset by tax deducted under the non-resident landlord scheme.
- It has no chargeable gains for the period.
Non-resident UK property gains
From 6 April 2019
- Non-resident companies move from Capital Gains Tax to Corporation Tax on their UK immovable property gains.
- See Non-resident CGT: UK property
Annual Tax on Enveloped Dwellings (ATED)
- ATED-CGT is abolished from 6 April 2019.
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