What is the Non-resident Landlords Scheme?
The Non-resident Landlords (NRL) Scheme is a scheme for taxing the UK
rental income of persons whose ‘usual place of abode’ is outside the UK. For
clarity this is what is referred to as a ‘non-resident landlords’. The Scheme
applies to UK rental income paid to non-resident landlords from 6 April 1996.
Different arrangements apply to UK rental income paid before 6 April 1996. Letting
agents of a non-resident landlord must:
- deduct tax from the landlord’s UK rental income; and
- pay the tax to HMRC’s Accounts Office, Shipley
How do I pay and when?
For the purposes of the NRL Scheme, the year runs from 1 April to the
following 31 March. Letting agents and tenants who have to operate the Scheme
must account for tax each quarter - that is, for the three-month periods ending
on 30 June, 30 September, 31 December and 31 March.
What if I don’t have to
pay?
Letting agents and tenants do not have to deduct tax from the rental
income of a non-resident landlord if HMRC has told them in writing that the
landlord is approved to receive the rental income with no tax deducted. Non-resident
landlords can apply to HMRC for approval to receive rental income with no tax
deducted where:
- their UK tax affairs are up to date; or
- they have never had any UK tax obligations; or
- they do not expect to be liable to UK tax for the year in which the application is made.
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