How does the Non-Resident Landlord Scheme work?

If you live abroad for 6 months or more a year, your UK letting agent or tenant takes basic rate tax (20% in 2026-27) off your rent for HMRC, unless HMRC approves you to receive it in full.

The Non-Resident Landlord Scheme (NRLS) collects tax on UK rent from landlords whose "usual place of abode" is outside the UK. It rests on section 971 of the Income Tax Act 2007 and regulations made under it. This page follows HMRC's guidance as checked on 16 October 2026.

Who counts as a non-resident landlord

The test is where you usually live, not your tax residence. HMRC normally treats an absence from the UK of 6 months or more as a usual place of abode outside the UK, so you can be UK resident for tax and still be in the scheme. Individuals, companies, trustees and partnerships can all be non-resident landlords, and each partner is treated separately for their share.

Spouses and civil partners who both live abroad are two separate landlords, and each needs their own approval. If only one of you lives abroad, the scheme covers only that person's share. Members of the armed forces and other Crown servants posted abroad are treated like anyone else.

Who has to deduct the tax

The scheme year runs from 1 April to 31 March. The agent or tenant works out the tax for each quarter ending 30 June, 30 September, 31 December and 31 March, and pays it within 30 days of the quarter end. By 5 July they send HMRC an annual return on form NRLY and give you a certificate, such as form NRL6, showing the tax taken.

How the deduction is worked out

The agent adds up the rent received in the quarter, takes off expenses they paid that they are reasonably satisfied are allowable, and multiplies the rest by the basic rate. Repairs, agent fees, insurance and ground rent can come off. Interest on residential property cannot.

Say an agent collects £3,000 rent for April to June 2026 and pays a £300 management fee and a £200 boiler repair:

Getting your rent in full

You can apply to HMRC to receive rent with no tax deducted, using form NRL1 online or on paper. HMRC approves you and registers you for Self Assessment if your UK tax affairs are up to date, or you have had no UK tax obligations, or you do not expect to owe UK tax for the year. GOV.UK says HMRC will not approve you if you are late with returns or payments. If you are about to move abroad, apply no earlier than 3 months before you leave.

Approval usually runs from the first day of the quarter in which HMRC received your application. HMRC writes to the agents or tenants named on the form. It can withdraw approval later, and you can appeal in writing within 90 days.

What this means for you

The scheme is a way of collecting tax, not your final bill. GOV.UK says you still declare the rent on a Self Assessment tax return unless HMRC tells you not to, and the tax on your certificate is set against what you owe. You cannot use HMRC's own online return service, so you file by post or with commercial software, completing the residence and UK property pages. The paper deadline is 31 October.

If your rent is below your personal allowance and you are entitled to one, you can claim back tax deducted under the scheme on form R43. For 2027-28, the government's technical note says the withholding rate will move to the property basic rate, which Finance Act 2026 sets at 22%.

Your UK rent counts towards Making Tax Digital qualifying income if you live abroad. HMRC's guidance gives the example of a landlord who is tax resident in Spain: only the UK rent counts. But if your 2024-25 return included the residence pages (SA109), you are exempt from Making Tax Digital for 2026-27. The 28 October 2026 Budget said people expected to be non-resident will stay exempt from MTD until further notice, with regulations due before April 2027. The residence pages also cover other cases, such as split-year treatment, so not every SA109 filer is in that group. If you are not, you will need MTD from 2027-28 if your 2025-26 qualifying income is over £30,000.

Steps if you let a UK property from abroad

1. Tell your letting agent, or your tenant if there is no agent, that you are moving or living abroad.
2. Decide whether to receive rent with tax deducted or apply on form NRL1 to receive it in full.
3. Get your UK tax returns and payments up to date first, as HMRC will not approve you otherwise.
4. Keep every NRL6 certificate, because it shows the tax you can set against your bill.
5. File your Self Assessment return each year with the residence and property pages, by post or through software.
6. Run the free MTD check on your UK rent to see whether Making Tax Digital applies to you.

The landlord tax guide explains how the profit itself is taxed, and the landlord section has more guides.