How to report rental property to HMRC if you live outside the UK

When you leave the UK to live abroad and rent out a residential property in the UK, you will be treated as a non-resident landlord by HMRC.

This will generally mean your UK letting agent, or potentially your tenants, need to deduct tax from your net rental income and pay this to HMRC.

As this will impact your cashflow, you can apply to HMRC for its approval to receive the rental income with no tax deducted. The application can be made using form NRL1.

It is important to note that even if HMRC accepts the application so the rent can be paid without tax deducted, the rental income will still remain liable to UK income tax and you will generally be required to submit a personal tax return to HMRC. The need to complete a tax return will depend on your personal circumstances.

You should also be aware of the need to confirm your UK tax residence status and should seek professional advice if you are not sure of your situation.

You should also be aware that non-UK residents are subject to UK capital gains tax on capital gains arising from direct or indirect disposals of all types of UK land and property as well as interests in UK property rich entities. HMRC require any disposals to be reported to them and the tax be paid within 30 days.

We can help advise you in respect of the above matters, based on your specific circumstances. Please contact us on 01923 901 500 or use our simple online contact form to arrange a free initial consultation.

Date published 6 Oct 2020 | Last updated 20 Mar 2024

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.