The Non-Resident Landlord Scheme (NRLS) 2026
Last updated 23 June 2026 · 9 min read · By the LandlordTaxAi Editorial Team
The short answer
If you let UK property while living abroad, your letting agent (or your tenant, where rent tops £100 a week and there is no agent) must deduct 20% tax from your rent and pay it to HMRC — unless you apply with form NRL1 to receive your rent gross and settle the tax yourself through Self Assessment.
Moving abroad does not switch off UK tax on your rental income — it changes how the tax is collected. The Non-Resident Landlord Scheme is designed to make sure HMRC gets its share even when you are overseas, and it puts a real obligation on your agent or even your tenant. This guide explains how it works, how to receive your rent in full, and how it sits alongside the tax you will face when you eventually sell. For the sale side, read our non-resident Capital Gains Tax guide.
Who deducts the tax — and when
| Your situation | Who must deduct 20% |
|---|---|
| You use a UK letting agent | The letting agent |
| No agent, rent over £100/week | The tenant |
| You hold HMRC gross-payment approval (NRL1) | Nobody — you pay via Self Assessment |
How to handle it, step by step
- 1
Confirm you're a non-resident landlord
The scheme applies if your usual home is outside the UK — broadly, if you live abroad for six months or more in a tax year — and you receive rent from UK property.
- 2
Understand who deducts the tax
If you use a UK letting agent, the agent must deduct basic-rate tax. If there is no agent and the tenant pays more than £100 a week, the tenant must deduct it instead.
- 3
Apply to receive your rent gross
Submit form NRL1 to HMRC to be approved to receive rent without tax deducted. Approval means your agent or tenant pays you the full rent and you settle the tax yourself.
- 4
Declare the income on Self Assessment
Whether tax was deducted or not, report your UK rental income on a Self Assessment return each year, claim your expenses and allowances, and offset any tax already deducted.
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Rental profit & tax calculator
Estimate the tax on your rental income for 2026/27
Result
- Taxable profit (rent − expenses)
- £11,200
- Income Tax at 40%
- £4,480
- Less mortgage interest credit (20%)
- − £1,000
- Tax due on this property
- £3,480
- Income after tax
- £7,720
Estimate based on verified 2026/27 UK rates. Informational only — not personal tax advice.
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LandlordTaxAi turns your UK rental statements into a ready-to-file return — useful when you are overseas and on gross-payment status.
See how it worksWhy most overseas landlords apply for gross payment
Having 20% deducted from every rent payment can leave you out of pocket all year, only to reclaim it later once your expenses and allowances are accounted for. Gross-payment approval through form NRL1 means you keep the full rent during the year and settle the actual tax once, through Self Assessment — far better for cash flow. It also lifts the awkward legal duty off a tenant who may not understand it. The trade-off is that you must keep your UK tax returns up to date.
Frequently asked questions
What is the Non-Resident Landlord Scheme?
It is an HMRC scheme that ensures tax is collected on UK rental income paid to landlords who live abroad. Under it, your UK letting agent — or your tenant where there is no agent and the rent is more than £100 a week — must deduct basic-rate tax (20%) from your rent and pay it to HMRC, unless HMRC has approved you to receive the rent gross.
How do I receive my rent without tax deducted?
You apply to HMRC using form NRL1 (for individuals). If your tax affairs are up to date and you agree to keep filing UK returns, HMRC issues an approval number to your agent or tenant telling them to pay you the full rent. You then declare the income and pay any tax due through Self Assessment, rather than having 20% withheld at source.
Does the scheme mean I don't pay UK tax?
No. The scheme only changes how and when the tax is collected, not whether it is due. UK rental income is always taxable in the UK regardless of where you live. Being approved to receive rent gross simply means you pay through your annual Self Assessment return instead of having 20% deducted from each payment — which usually helps your cash flow.
Does my tenant really have to deduct tax?
Yes, if there is no UK letting agent and the tenant pays you more than £100 a week. In that situation the tenant is legally responsible for deducting 20% and paying it to HMRC quarterly. Many tenants are unaware of this obligation, which is one reason overseas landlords often apply for gross payment status to avoid putting the duty on their tenant.
How does this relate to Capital Gains Tax when I sell?
They are separate. The Non-Resident Landlord Scheme deals with tax on rental income while you let the property. When you sell, Non-Resident Capital Gains Tax applies instead, with its own 60-day reporting rule that you must follow even if no tax is due. Overseas landlords need to keep both in mind.
Written and reviewed by the LandlordTaxAi Editorial Team. Our guides are reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.
Last reviewed: 23 June 2026 · Based on HMRC guidance on the Non-Resident Landlords Scheme, including the basic-rate deduction by agents and tenants and the NRL1 application to receive rent gross. This article is informational only and does not constitute tax advice. Cross-border tax can interact with double-tax treaties — always check the latest details on GOV.UK or with a qualified adviser.