Non-resident landlords have UK withholding tax deducted from rental property income.
If you live abroad for 6 months or more per year, you’re classed as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC) – even if you’re a UK resident for tax purposes. Companies and trusts can also be non-resident landlords.
Non-Resident Landlord Scheme
Under the non-resident landlord scheme, basic rate income tax is deducted from your rental income by your letting agent or tenant, who will pay this tax directly to HMRC on your behalf. You will be given a certificate by the person deducting the tax at the end of the tax year saying how much tax they’ve deducted.
You then complete a UK self assessment tax return (SATR) in order to reclaim overpaid tax or calculate underpaid tax, depending on your other income and circumstances.
You can apply to HMRC to get your rent paid to you gross, by completing form NRL1i (NRL2i for companies and NRL3i for trusts). If HMRC agree to gross payments, you then pay any tax due through your UK SATR.