The Non Resident Landlord Scheme

If a tenant pays rent of more than £100 a week (£5,200 per annum) to a non-resident landlord they must deduct basic rate tax from the landlord’s UK rental income and pay the tax to the Inland Revenue’s Accounts Office, Cumbernauld. Tenants who pay rent of £100 a week or less do not have to operate the scheme unless they are told to do so by HM Revenue & Customs. When working out the amount to tax, the tenant can take off tax deductible expenses that are incurred for the purposes of letting the property.

However, you can apply as the landlord on form NRL1 to the Centre for Non Residents for approval to receive your rental income gross. This is usually given if your tax affairs are up to date or you do not expect to be liable to UK income tax for the tax year. You will still however need to include this information on a UK self assessment tax return if you are sent one. For further information on the landlords and tenants responsibility see the information on www.hmrc.gov.uk/cnr website or contact your local TaxAssist Accountant.

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.