Non Residential Landlords (NRL)

What is a Non-Resident Landlord?

Property investors are considered Non-Resident Landlords if they spend more than six months in any tax year outside the UK.

The Statutory Residence Test or other tax definitions of residence don't apply to Non-Resident Landlords. Instead, HM Revenue & Customs (HMRC) looks at their 'usual place of abode'. This is where a landlord may stay for more than six months, but it doesn't have to be a main or permanent home.

Under the scheme, a landlord can have UK tax residence but their 'usual place of abode' in another country.

Other Non-Resident Landlords include:

Companies renting out property in the UK with a registered office or main place of business outside the UK.

Members of the armed forces or Crown servants, such as diplomats, posted overseas.

If a property is rented out by joint owners and one is a Non-Resident Landlord, the profits are usually split according to the share of ownership of each. But only the share of the Non-Resident Landlord comes under the scheme.

Having a PO Box or 'care of' address in the UK is not enough for a landlord to claim a usual place of abode in the UK.

Non-Resident Landlord Scheme Guidance

If you are a landlord who is living outside the UK for over six months of a tax year, you must join the 'Non-Resident Landlord Scheme'. This means that letting agents, tenants and anyone finding tenants for non-resident landlords must pay any tax on rents due to the landlord, unless HMRC has told them not to do so in writing. Failure to do this could result in being fined.

Letting agent obligations if you pay rent to a Non-Resident Landlord

Letting agents have no lower rent limit and should withhold tax on any rents they receive for a Non-Resident Landlord. They then need to make an annual return to HMRC declaring how much rent they‘ve collected for the landlord.

Non-Resident Landlord Tax

Non-Resident Landlords don't have special tax returns.

Individuals declare their rental income and expenses on the UK Property pages (SA105) of the self-assessment return, while companies complete and file a corporation tax return (CT600).