The UK’s stable and transparent property market continues to attract overseas investors seeking income and long-term capital growth. However, non-UK residents who rent out property in Britain must comply with the Non-Resident Landlord Scheme (NRLS) – a critical part of the UK’s tax framework for foreign landlords.
Understanding this scheme is essential for avoiding penalties, ensuring tax efficiency, and maintaining compliance with HMRC. At Fraser Bond, we help international property owners navigate UK regulations with clarity and confidence – from acquisition through to lettings and tax strategy.
The Non-Resident Landlord Scheme is a UK government initiative administered by HM Revenue & Customs (HMRC). It ensures that income tax is collected from individuals and companies who:
Live outside the UK for more than 6 months in a tax year, and
Earn rental income from UK property.
Under the NRLS, letting agents or tenants are required to deduct basic rate tax (currently 20%) from the gross rent before paying the landlord, unless HMRC grants an exemption.
You must register for the NRLS if you are:
An individual landlord living abroad
A company registered overseas but owning UK rental property
A trustee of a trust owning UK property while being based overseas
HMRC considers you non-resident for tax purposes if you live outside the UK for 183 days or more in a tax year.
If you use a letting agent, the agent deducts tax from the gross rent and pays the net amount to you.
If you don’t use an agent, and the rent exceeds £100 per week, the tenant is legally required to withhold and remit the tax to HMRC.
Non-resident landlords can apply to HMRC (using Form NRL1, NRL2, or NRL3) to receive rental income without tax deduction, provided:
Their UK tax affairs are up to date, or
They do not expect to owe UK tax on the income
If approved, HMRC notifies the agent or tenant to pay gross rent directly to the landlord.
Even if approved to receive gross rent, non-resident landlords must:
File an annual UK self-assessment tax return, and
Pay any tax due by 31 January following the end of the tax year
Landlords can reduce their taxable rental income by deducting:
Letting agent fees
Property maintenance and repairs
Mortgage interest (subject to restrictions)
Council tax and insurance
Ground rent and service charges
Non-residents are liable for CGT when selling UK residential or commercial property. You must:
Report the sale to HMRC within 60 days, and
Pay any CGT due within the same period
UK property is subject to IHT even for non-residents, making long-term estate planning essential.
Depending on your home country, you may benefit from a Double Taxation Agreement (DTA), which helps avoid being taxed twice on the same rental income.
As a full-service UK property consultancy, Fraser Bond offers expert support for overseas landlords, including:
NRLS registration and HMRC compliance assistance
Lettings and property management with tax-compliant rent collection
Introductions to UK tax advisors and accountants
Portfolio advisory, including tax optimisation and structuring
Capital gains and exit strategy planning
Our international clients rely on Fraser Bond to manage their UK assets efficiently, ensuring both profitability and compliance.
The Non-Resident Landlord Scheme is a key part of owning rental property in the UK from abroad. While it may seem complex, with the right advice and professional management, compliance is straightforward – and your investment remains fully optimised.
Fraser Bond is proud to support global investors with end-to-end guidance on NRLS, tax returns, and strategic property planning. Whether you're purchasing your first UK rental or expanding a portfolio, we ensure your tax affairs are managed properly from day one.
