If you live overseas and let property in the UK, the Non-Resident Landlord Scheme affects how your rent is taxed. We handle your NRL1 application to receive rent gross, file your UK property return, and take the scheme off your plate, all at a fixed fee.
Non-Resident Landlord Scheme
The Non-Resident Landlord Scheme (NRLS) applies when you live outside the UK for six months or more and receive rental income from UK property. Under the scheme, your letting agent, or your tenant if the rent is £100 a week or more and there is no agent, must deduct basic-rate tax from your rent before paying it to you, and pay that tax to HMRC each quarter, unless you have HMRC approval to receive your rent with no tax deducted.
Your Tax Help Accountants handles the whole scheme for non-resident landlords. We apply for gross-payment approval using form NRL1 so you receive your rent in full, register you for Self Assessment, prepare and file your UK property tax return claiming every allowable cost and the mortgage-interest tax credit, and deal with your agent and HMRC on your behalf. Wherever in the world you live, we keep your UK property tax right and stress-free.
Being non-resident does not mean you escape UK tax on UK rent, but with NRL1 approval you can at least receive your rent gross and settle the tax properly through a return, rather than having 20 per cent withheld at source all year.
The Detail That Matters
If you let out UK property while living abroad, the Non-Resident Landlord Scheme decides how the tax on your rent is collected. Register correctly and you receive rent gross and settle through Self Assessment; fail to, and your agent or tenant must deduct 20% at source.
Without an approval, a letting agent (or a tenant paying over £100 a week) must deduct basic-rate tax at 20% from your rent and pay it to HMRC quarterly, tying up cash you may not owe once expenses are counted.
By applying on form NRL1 and agreeing to file UK returns, HMRC approves you to receive rent without deduction. You then declare the income and pay tax on the actual profit, usually far less than 20% of the gross rent.
Non-resident landlords keep the UK personal allowance (in most cases) and deduct allowable expenses, with mortgage interest as a 20% credit under Section 24. Many end up owing little once these are applied.
Non-residents are within UK Capital Gains Tax on residential property and must file a 60-day return on sale, so the scheme is only part of the picture; we handle the whole position.
The costliest error is not registering, so 20% is stripped from gross rent, leaving landlords out of pocket for months and reclaiming the excess later, when a simple NRL1 approval would have let them receive rent gross.
Key Figures
How We Help
We apply to HMRC on form NRL1 so your rent is paid to you in full without tax deducted, and you settle the correct tax through your annual return instead.
Your UK rental income declared on Self Assessment, every allowable expense claimed, the 20 per cent mortgage-interest credit applied, and your bill worked out accurately.
We deal with your letting agent and HMRC directly, sort out the quarterly NRLS deductions and annual NRL6 certificates, and reconcile any tax already withheld against what you actually owe.
All the forms, calculations and correspondence handled on your behalf, so you never have to decode HMRC's rules or sit on hold.
A clear fixed fee quoted after a free call, your position explained in plain English, and never a surprise bill.
We act quickly, and where earlier years are involved we put those right too, reclaiming refunds or minimising penalties.
Without NRL1 approval, your agent or tenant deducts 20 per cent from your rent all year and pays it to HMRC, which can leave you out of pocket while you wait to reclaim any overpayment. Many non-resident landlords also fail to file a UK return at all, which builds up penalties. We fix both: approval to receive rent gross, and an accurate return that claims your costs.
Recent Client Outcome
A landlord who moved to Dubai found their agent deducting 20% from the gross rent, well above their real tax bill after expenses.
What we did. We applied on form NRL1 for approval to receive rent gross, registered them for Self Assessment, and prepared a return claiming all expenses and the Section 24 interest credit.
The outcome. Their actual tax on the real profit was a fraction of the 20% being deducted, and we recovered the over-deducted tax from earlier quarters.
Registering under the scheme freed up their cash flow and matched the tax to their genuine, much lower, liability.
Why People Come to Us
Questions Answered
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Or email info@yourtaxhelp.co.uk, we typically respond within two business hours.
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