Non-Resident Landlord (NRL) Scheme

Non-Resident Landlord (NRL) Scheme

If you live overseas but earn rental income from property in the UK, HMRC hasn’t forgotten about you—and neither should your accountant. The Non-Resident Landlord Scheme (NRL) is a legal mechanism designed to ensure that UK tax is paid on rental income earned by landlords who live outside the UK for more than six months in a tax year.

At Numerate Accountants, we guide overseas landlords through the NRL Scheme with precision and care, making sure compliance doesn’t become a costly afterthought.

Who Is Considered a Non-Resident Landlord?

You’re classed as a non-resident landlord if:

• You live abroad for 6 months or more per year, and

• You own and rent out property in the UK, either as an individual, partnership, company, or trust.

It doesn't matter if you’re a British citizen or a foreign national—the residency rule is strictly based on physical presence, not nationality.

What Does the NRL Scheme Require?

The NRL Scheme, administered by HMRC, requires UK letting agents or tenants (in some cases) to deduct basic rate income tax (currently 20%) from the rent before passing it on to the landlord, unless the landlord has HMRC approval to receive rent gross.

There are three parties who may need to register:

Party     Action Required

• Non-resident landlords Apply to HMRC to receive rent without tax deducted

• Letting agents Register with the scheme and deduct tax unless exemption granted

• Tenants If no agent is involved and rent exceeds £100/week, tenant must deduct and pay tax

How to Apply for Gross Payment Status:

To avoid tax being deducted at source, landlords can apply to receive rental income gross using the appropriate NRL form:

NRL1: Individual landlords

NRL2: Companies

NRL3: Trusts

HMRC will only grant this if:

• Your tax affairs are up to date, or

• You’ve never had UK tax obligations before

Once approved, HMRC notifies the letting agent or tenant so they can pay your rent in full.

Tax Returns & Responsibilities

Even if you receive your rent gross, you must still submit a UK Self-Assessment Tax Return (SATR) each year and declare:

• Rental income

• Allowable expenses (repairs, agents' fees, mortgage interest, etc.)

• Net profit (or loss)

We recommend working with an experienced accountant to:

• Maximise your allowable deductions

• Avoid late filing penalties

• Deal with double taxation if you're taxed both in the UK and abroad

Special Note for Overseas Companies & Trusts

Overseas companies or trusts letting out UK property fall under slightly more complex rules. They may also need to register with Companies House as an Overseas Entity and meet Annual Tax on Enveloped Dwellings (ATED) reporting obligations if the property value exceeds £500,000.

How Numerate Accountants Can Help

As specialists in landlord taxation and cross-border compliance, Numerate Accountants can:

• Register you for the NRL Scheme

• Apply for gross payment status on your behalf

• Prepare and submit your annual Self Assessment

• Advise on capital & Revenue Claimable Expenditures. 

• Liaise with HMRC to handle queries or tax code issues

We make overseas property letting hassle-free, tax-efficient, and compliant.

Need Help?

If you're a non-resident landlord or managing property for someone abroad, don’t leave compliance to chance. Reach out to us today for expert guidance on the NRL Scheme and UK rental tax.

If you want to discuss the Non-Resident Landlord (NRL) Scheme further, please contact NUMERATE ACCOUNTANTS at 07765838151.