Guides · Updated 21 October 2026 · By Alex Withington, founder

The Non-Resident Landlord Scheme, explained for owners abroad

If you've moved abroad and still let a flat in the UK, HMRC's Non-Resident Landlord (NRL) Scheme decides how the tax on your rent is collected. It doesn't change whether you owe tax. Here's how it works in practice.

Who has to deduct the tax

If you use a UK letting agent, the agent is responsible. They register with HMRC for the scheme, withhold 20% of the rent after deducting expenses they've paid on your behalf, and send HMRC quarterly returns and an annual summary. This applies whatever the rent.

If you don't use an agent and your tenant pays you directly, the tenant has to withhold the tax if the rent is more than £100 a week. Most tenants don't know this, and HMRC can pursue the tenant for tax that wasn't deducted.

Getting your rent paid gross (NRL1)

Most owners abroad apply to receive rent without deduction, so that 20% isn't held back every quarter and then reclaimed through Self Assessment. You apply to HMRC on form NRL1 (individuals). HMRC typically approves it if:

• your UK tax affairs are up to date, or
• you haven't had any UK tax obligations before, or
• you don't expect to owe UK tax for the year.

Once approved, HMRC tells your agent or tenant, who can then pay you in full. Approval changes only how tax is collected. You still declare the rental profit on your Self Assessment return and pay any tax due.

What this means for your agent and your statements

• Check whether your agent is withholding 20% when you already have gross-payment approval. If they are, send them HMRC's approval letter.
• Changing agent? A new agent needs HMRC's written authorisation before paying you gross. See the scheme when you change agent.
• If you don't have approval, your statements should show tax withheld each quarter, and your agent should give you an annual certificate (form NRL6) to use on your tax return.
• Some agents charge an admin fee for running the scheme. It's worth knowing what you're paying for it.

Tax on the rental profit itself

As a non-resident you may still be entitled to the UK personal allowance, depending on your nationality and residence, and your country of residence may have a double tax treaty with the UK. Rental profit is calculated after allowable expenses; for residential property, mortgage interest gets a basic-rate tax credit instead of being deducted. These rules are worth a conversation with an expat tax adviser.

Official guidance: GOV.UK: paying tax on rent to landlords abroad and HMRC's Property Income Manual (PIM4800 onwards). Summary based on that guidance and on practitioner summaries, checked October 2026.