Non-Resident Landlord Scheme
UK-wide
The Non-resident Landlords Scheme is the HMRC regime that governs how UK tax is collected on rental income paid to a landlord whose usual place of abode is outside the UK. Under it, a UK letting agent, or the tenant where there is no agent, deducts basic rate income tax at 20% from the rent before the landlord is paid, unless HMRC has approved that landlord to receive the rent gross. HMRC sets out the scheme at PIM4810.
Who it applies to
It applies to any overseas landlord whose usual place of abode is outside the UK, which HMRC treats as living abroad for six months or more. Individuals, companies and trustees all fall within it, and nationality makes no difference. The scheme is one part of a wider set of duties that apply to letting a UK property from abroad.
Who deducts the tax
A UK letting agent must operate the scheme whatever the rent is. Where there is no agent, the duty passes to the tenant, but only where rent exceeds £100 a week. HMRC can direct a tenant to operate the scheme below that threshold, and does so where a landlord's combined rent across several tenants exceeds it.
What the deduction is, and is not
The 20% deducted is tax on account, not a final bill. It is credited against the landlord's actual liability, which is settled through Self Assessment, so the records still have to meet HMRC's standard from wherever the landlord is living. Software built for overseas landlords exists for that. Landlords can apply for approval to receive rent gross using form NRL1, but approval changes how the tax is collected rather than whether it is owed.
Statutory basis
The scheme operates under sections 971 and 972 of the Income Tax Act 2007 and the Taxation of Income from Land (Non-residents) Regulations 1995 (SI 1995/2902). The Renters' Rights Act 2025 changes tenancy law rather than tax, so the scheme is unaffected by it and continues to apply unchanged as at September 2026.
How the deduction is calculated, how to apply for gross payment and how the income is reported are covered in full in our guide.
