The UK non-resident landlord scheme makes a letting agent, or a tenant paying more than £100 a week, deduct basic rate tax from rent paid to a landlord whose usual place of abode is outside the UK. A landlord approved by HMRC on form NRL1 receives the rent gross and pays through Self Assessment.
Who counts as a non-resident landlord
A non-resident landlord is anyone with UK rental income whose usual place of abode is outside the UK. HMRC's guidance, updated 18 March 2026, says it normally regards an absence from the UK of 6 months or more as a usual place of abode abroad, and that a landlord can be UK resident for tax purposes and still fall inside the scheme.
That makes the scheme a separate question from the statutory residence test. The two tests can give different answers for the same person in the same tax year.
The scheme also covers companies incorporated or run from abroad, trusts whose trustees all live abroad, and partnerships, where each partner is a separate landlord. Joint-owner spouses are two landlords and apply for approval separately.
The legal basis is sections 971 and 972 of the Income Tax Act 2007 and the Taxation of Income from Land (Non-residents) Regulations 1995, SI 1995 No. 2902.
Who has to deduct the tax
A letting agent must operate the scheme on any amount of rent, unless HMRC has approved the landlord in writing. An agent is anyone in the UK who helps run the rental business and receives the rent or controls where it goes, a friend included. Agents register on form NRL4.
Where there is no agent, the tenant deducts the tax if the rent is more than £100 a week. A tenant-finder who collects rent for no more than 3 months, with tax of no more than £100, is outside the scheme.
How the withholding is worked out
The deduction is the basic rate of income tax applied to each quarter's rent, less deductible expenses the agent or tenant paid on the landlord's behalf. For 2026-27 the basic rate is 20%.
An expense comes off only where the agent is reasonably satisfied it is allowable; the landlord's word alone does not meet that test.
Illustration, using HMRC's method: a flat let at £1,500 a month through an agent who paid a £300 plumbing repair in the quarter.
- Rent received in the quarter · £4,500
- Less deductible repair · £300
- Net rent · £4,200
- Tax at 20% · £840, paid to HMRC within 30 days of the quarter end
- Same quarter at a 22% rate · £924, or £84 more
How form NRL1 stops the deduction
An individual landlord applies on form NRL1, online or by printing, signing and posting the form. Companies use form NRL2i and trusts NRL3i. An applicant who wants a tax agent to act for them posts the paper form with form 64-8.
HMRC normally approves where the form is complete and HMRC is satisfied the landlord will meet their UK tax obligations, including landlords with no UK tax history. Late returns or unpaid tax lead to refusal, which can be appealed in writing within 90 days.
HMRC sends notices to the landlord and to each tenant or agent named on the form, giving the date from which rent is paid gross: usually the first day of the quarter in which HMRC received the application.
Approval moves the tax into Self Assessment. GOV.UK states that a non-resident landlord cannot file through HMRC's online services: the return goes by post by 31 October, or through commercial software or an adviser.
What changes in April 2027
Property income gets its own income tax rates from 6 April 2027. Section 7 of Finance Act 2026, which received Royal Assent on 18 March 2026, sets the property basic rate at 22%, the property higher rate at 42% and the property additional rate at 47% for 2027-28.
The HMRC and HM Treasury technical note of 26 November 2025 states that the scheme currently withholds at the basic rate and that, following these changes, the withholding rate will be the property basic rate. The rates are enacted law. HMRC's scheme guidance still works its examples at the 20% basic rate, so the move to 22% for the scheme rests on the technical note until that guidance is updated.
Heed's reading: a landlord who stays inside the scheme pays 2 percentage points more on every quarter's net rent from 2027-28, before any year-end adjustment. NRL1 approval moves the tax to Self Assessment, where the property rates and any Personal Allowance apply at the year end.
See the UK exit tax rules for temporary non-residence and the United Kingdom guide for headline rates. Heed monitors international tax law changes across every jurisdiction we track and sends personalised alerts before they affect your situation.
Deadlines and paperwork
The scheme runs on its own year, 1 April to 31 March.
- Quarterly payment · within 30 days of 30 June, 30 September, 31 December and 31 March
- Annual return NRLY · to HMRC and the landlord by 5 July
- Certificate NRL6 · to the landlord by 5 July, showing tax deducted
- Records · rent, expenses, invoices and correspondence about the landlord's address, kept for 4 years
The landlord claims the NRL6 figure as a credit on the tax return. Our tax residency guides cover how day counts interact with the scheme.