Landlords - Overseas Landlords and Tax Implications

The Non-Resident Landlords Scheme is a scheme for taxing the UK rental income of non-resident Landlords.

The term 'non-resident landlords' includes individuals, companies and trustees who have:

• A UK rental income and
• A 'usual place of abode' outside the UK. In the case of individuals, this is regarded as an absence from the UK for 6 months or more

The scheme requires UK Lettings Agents to deduct Basic Rate Tax (currently 22%) from any rent collected for non-resident landlords. If non-resident landlords do not have UK letting agents acting for them, or if a "let-only" service is provided, and the rent is more than £100.00 per week, their tenants must deduct the tax. In calculating the amount to tax, letting agents or tenants take into account any allowable deductible expenses they pay in a quarter.

For non-resident Landlords to be able to receive rents with no tax deducted, they must successfully apply to the Inland Revenue for approval. If successful, a notice of approval will be sent to the non-resident landlord and a separate notice will be sent to us, the Letting agent, authorising us to pay rent without deducting tax. Please note that, even though rent may be paid with no tax deducted, it is still liable to UK tax and, therefore, must be included in any Tax Return.

We prefer all of our non-resident landlords to apply for approval for us to pay rent without tax deducted. If you do not gain approval, we charge a fee of £176.25 inc VAT per quarter to cover our costs in generating quarterly tax returns on your rental income.

Applications should be made via the following forms:

• NRL1 (for individuals)
• NRL2 (for companies)
• NRL3 (for trustees)
• By letter (for foreign immunes)

These forms can be obtained from our office, or by telephoning the Inland Revenue helpline on 0151 472 6208. Completed forms should be sent to:

1. For HM Armed Forces personnel and other Crown Servants, to
Public Department 1 or Public Department 2
Ty Glas Road
Llanishen
Cardiff
CF14 5YZ (for Dept 1) or CF14 5YD (for Dept 2)

Tel: 029 20325000 (Dept 1) 029 20325363 9 (Dept 2)

2. For all other Non-Resident Landlords, to
The Centre for Non Residents
NRLS Processing
Fitzroy House
PO Box 46
Nottingham
NG2 1BD

Further information on terms of business, services, legislation and charges are detailed in our Fees and Terms of Business. Please download a copy now or request a brochure via email.