Tax guide for non‑resident landlords

Introduction

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If you’re a landlord residing abroad but earning UK rental income living overseas, you’re still liable to pay UK tax on rental income from your UK properties. This guide explains how the Non‑Resident Landlord Scheme, UK tax obligations, allowances, and double taxation relief apply to non‑resident landlords.

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Who qualifies as a non‑resident Landlord?

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Under UK tax law, you’re considered a non‑resident landlord if your usual place of abode is outside the UK or you spend six months or more abroad in a tax year.

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The non‑resident landlord scheme

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Under the Non‑Resident Landlord Scheme, letting agents or tenants must deduct UK income tax at the basic rate (20%) before paying rent to you—unless you have approval from HMRC to receive gross rent via form NRL1.

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What tax is payable?

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Income is taxed based on net rental profit—income after allowable expenses such as agent fees, repairs, insurance and utility bills. Alternatively, a £1,000 property allowance can be deducted in lieu of actual expenses. 



Note that relief for mortgage interest is given by way of a 20% tax reducer.



Tax rates on net profits are as follows:

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• £0 - £12,570 = 0% *
• £12,570 - £50,270 = 20%
• £50,270 - £125,140 = 40%
• £125,140 + = 45%

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*You will be entitled to the personal allowance if you are a British citizen or EEA national.

If tax is payable in the overseas country, as well as the UK, to mitigate double taxation, the overseas country must credit tax paid in the UK.

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Compliance checklist

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If you're a non‑resident landlord earning UK rental income living overseas, it's essential to ensure full compliance with UK tax obligations while growing your property investments. Actions you can take as a non-resident landlord:

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1. Register under the Non‑Resident Landlord Scheme.
2. Submit form NRL1 if you wish to receive rent gross.
3. File UK Self‑Assessment, including SA105 & SA109 if claiming allowances or reliefs.
4. Keep comprehensive records of income and reasonable expenses.
5. Check if you qualify for personal allowance or tax treaties.
6. Consider professional advice for tax planning and compliance.

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Why choose a UK tax adviser?

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Managing cross-border UK rental income can be complex. A specialist tax firm can help you with:


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• Registration and interaction with HMRC
• Accurate calculation of net rental profits and allowable deductions
• Claims for personal allowance and treaty relief
• Strategic tax planning for minimal liability
• Filing and deadlines to avoid penalties