REMEZ & PARTNERS

The non-resident landlord scheme

If your usual home is outside the UK and you let a UK property, your letting agent — or your tenant where there is no agent — must withhold 20% of the rent and pay it to HMRC. Approval under the scheme, applied for on form NRL1, lets you receive the rent gross and pay the tax through Self Assessment instead. Approval is not retrospective.

It catches more people than expect it. You do not have to think of yourself as an expat — move abroad for a job with a flat still let in the UK, and the scheme applies from the day you go.

Why approval is worth having

The withholding is 20% of the rent, not of the profit. It takes no account of your letting agent's fees, the repairs, the insurance, the mortgage interest relief, or your personal allowance.

For most landlords that is far more than the eventual tax. The excess comes back through the return, so nothing is lost — but you have financed HMRC for up to a year while a mortgage still needs paying from what is left.

How to get approval

  1. File form NRL1 — ideally before you leave the UK, or before the tenancy starts.
  2. HMRC assesses whether your tax affairs are up to date. Outstanding returns are the usual reason for refusal.
  3. Approval is issued to you and to your agent, who then stops withholding.
  4. You file a return each year and pay the tax properly calculated — by 31 January, as usual.

The second step is why this is not purely administrative. Applying with returns outstanding is applying to be refused; sorting the filings first is the faster route even though it feels like the slower one.

The version without an agent

Where the rent is paid directly by the tenant and exceeds the relevant limit, the obligation to withhold falls onthe tenant. They become responsible for deducting 20% and paying it to HMRC — a duty most private tenants have never heard of, and one that puts them at risk if it is not done.

Getting approval before you go removes the problem for both of you.

Moving abroad, or already gone?

We handle NRL1 applications, non-resident returns, and the years already withheld. Tell us where you are and what is let — free assessment, fixed quote before anything starts.

Or send an email

Free assessment first. If there is work to do, you get a fixed quote in writing before anything starts.

What else changes when you leave

  • Form P85 tells HMRC you have left and is usually what triggers a refund of PAYE overpaid in the year of departure — see residence and your UK tax year.
  • Your residence status for tax is a separate question from the NRL scheme, decided by the Statutory Residence Test.
  • Capital gains on UK residential property remain within UK tax for non-residents, and the 60 days reporting deadline still applies.
  • Quarterly filing under Making Tax Digital may apply to you as well — see MTD for landlords.

None of these follow automatically from each other, which is the honest difficulty: leaving the country changes four things at once, and each has its own form.

Questions people ask

Who counts as a non-resident landlord?

Broadly, a landlord whose usual place of abode is outside the UK — which HMRC generally reads as being absent for six months or more. It is not about nationality, and it is not the same test as tax residence, so people can be UK resident for tax and still within this scheme.

What does the scheme actually do?

Requires your letting agent — or your tenant, where there is no agent — to withhold 20% of the rent and pay it to HMRC. Approval under the scheme, applied for on form NRL1, lets you receive the rent in full and settle the tax through Self Assessment instead.

Does approval mean I pay no tax?

No — it means nothing is withheld at source. You still declare the rental profit on a return and pay the tax due, with your expenses and allowances properly taken into account, which is normally less than the withholding would have been.

My tenant pays me directly. Does this still apply?

Yes, and it is the version people miss. Where there is no letting agent and the rent exceeds the relevant limit, the obligation to withhold falls on the tenant — an awkward conversation, and one you can avoid entirely by getting approval first.

Is approval retrospective?

No. Withholding continues until approval is in place, so NRL1 is a form to file before you leave, not after the first deduction lands. The over-withheld amount is recoverable through the return, but you have lent it to HMRC in the meantime.

What if I have never declared the rent at all?

Living abroad does not remove the obligation, and HMRC receives agent and deposit scheme data regardless of where you are. The Let Property Campaign is the route back, and it is materially cheaper before a letter arrives than after.

Figures are for the tax year shown and change every April. They are general information, not advice — we check the current position for your circumstances before anything is filed.

Reviewed 19 October 2026.

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