The Non-Resident Landlord Scheme: A 2026 Guide for Overseas Landlords in Central London

Do you rent out a property in Central London while living overseas for at least 6 months of the year? If so, you may need to pay tax via the non-resident landlord scheme (NRLS). Under the non-resident landlord scheme, your agent or tenant deducts tax at 20% from the monthly rent and gives this directly to HMRC. 

However, you may be able to receive gross rent if you meet certain criteria. Our guide explains what Fitzrovia and Mayfair landlords need to know about the non-resident landlord scheme.

What Is the Non-Resident Landlord Scheme? 

For HMRC purposes, a ‘non-resident landlord’ has a usual place of abode is outside the UK for six months or more of the tax year. This means you could still be a UK tax resident, while falling under the NRLS rules. The scheme applies to individual landlords, and also companies and trustees receiving UK rental income. 

How Does the Non-Resident Landlord Scheme Work? 

Letting agents (or tenants paying more than £100 a week directly, where there’s no agent) have to deduct basic rate tax before giving their rent to the landlord. Agents calculate and pay the tax due to HMRC within 30 days of each quarter end, then file form NRLQ. As well as this quarterly cycle, annual NRLY return is due by 5 July each year. Alternatively, the landlord can apply to HMRC for approval to receive rent gross instead if they meet certain criteria.

How to Apply for the Non-Resident Landlord Scheme 

Landlords who want to receive UK rental income gross rather than net of tax can file form NRL1 for individuals, NRL2 for companies, or NRL3 for trustees. To qualify, you must either have no UK tax obligations before applying or be completely up-to-date, hold Sovereign Immunity from UK taxation, or not be due any UK income tax in the same tax year. It can take around 90 days to get approval, so it can be worth applying to receive tax gross as soon as you move abroad or start letting a UK property while living overseas.

The application process follows these steps, as a guideline:

1. Check eligibility based on your usual place of abode 
2. Complete the relevant NRL form (NRL1, NRL2 or NRL3)
3. Submit the form to HMRC
4. Wait for HMRC’s approval notice 
5. Pass the approval notice to your letting agent or tenant 
6. Agent or tenant pays gross rent to the landlord

Explainer: The Non-Resident Landlord Scheme Tax Rate and Self-Assessment

Even if the 20% basic rate deduction has been collected at source, non-resident landlords must still file a UK Self Assessment tax return every year. The deduction is only considered a payment on account of your actual UK tax liability. However, dependent on your nationality and any double taxation agreements you fall under, many non-resident landlords remain entitled to the UK Personal Allowance. A UK tax affairs specialist can help you to ensure your obligations are covered.

Landlords may have an additional tax consideration as well. From April 2026, Making Tax Digital for Income Tax applies to landlords with gross rental income over £50,000, requiring you to use MTD-compatible software to file quarterly reports to HMRC. The scheme threshold lowers to £30,000 from April 2027, and £20,000 from April 2028.

Non-Resident Landlord Scheme for Companies (Corporation Tax)

Since 6 April 2020, non-UK resident companies who earn UK rental income pay Corporation Taxes rather than Income Tax, and must file a CT600 Company Tax Return. However, company landlords still fall under NRLS rules with tax withheld at source unless they hold their own HMRC approval to receive rent gross, via form NRL2. 

Letting Agents & Tenants: What Are Their Responsibilities? 

The landlord’s letting agents deduct 20% tax from rent and give this directly to HMRC. Where there is no agent, however, tenants paying more than £100 a week directly to an overseas landlord must make the deduction instead. Their duties are to:

• Use Form 4 to register for NRLS within 30 days.
• Deduct tax at 20% from rent payments.
• Pay tax to HMRC within 30 days of the end of the quarter using an NRLQ form.
• File an annual return using the NRLY form by 5 July.
• Provide the landlord with a certificate of tax deducted by 5 July.

Help for Non-Resident Landlords

It may feel like another hoop for Central London landlords to jump through, but staying on top of NRLS is entirely manageable with the right support.

If you are preparing to let a property, our becoming a landlord guide explains more, and we are on hand to discuss how we can help. Contact Kubie Gold to find out about our property management services for Fitzrovia and Mayfair landlords living abroad.

Frequently Asked Questions