Important Guidance for Overseas Landlords: What You Need to Know About UK Tax Reporting

Angela Li
Jan 25
2 min read

As an individual or company owning UK rental property while living abroad, it’s essential to understand your UK tax obligations to remain compliant and avoid penalties. At JS Accountancy, we regularly support overseas landlords in meeting these requirements and want to highlight the key points every new landlord should know.

If your ‘usual place of abode’ is outside the UK, you are treated as a non-resident landlord for tax purposes. This applies regardless of whether you are a UK citizen living overseas or a non-UK national with UK property. HM Revenue & Customs (HMRC) requires that UK rental income is taxed in the UK, even if you live abroad.

Non-Resident Landlord Scheme (NRLS)

Under the Non-Resident Landlord Scheme (NRLS), letting agents — and in some cases tenants — must deduct UK tax from your rent before paying it to you. Usually, this is at a basic rate of 20% of the net rental income (after allowable expenses are taken into account). This tax is paid to HMRC quarterly.

If there is no letting agent, a tenant paying more than £100 per week in rent may be responsible for operating the scheme.

Although the deduction happens at source, you must also report your UK rental income to HMRC annually via a Self Assessment tax return — typically using the SA105 property and SA109 residence supplementary pages.

Option to Receive Rent Gross

Many overseas landlords prefer to receive rent in full without tax deducted at source to improve cash flow. To do this, you must apply to HMRC to register under the NRLS using form NRL1 (for individuals). If approved, your letting agent or tenant will stop deducting tax, but you still have to report and pay any UK tax due through your Self Assessment tax return.

Record Keeping and Penalties

Accurate record-keeping is vital. You should retain records of:

Rent received (dates and amounts)
Expenses incurred (with invoices/receipts)
Correspondence regarding your residency and rental arrangements

Failing to keep proper records or filing returns late can result in penalties from HMRC.

Additional Considerations

If you sell UK property, you must report and pay any Capital Gains Tax within 60 days of completion. Also, non-UK entities may have separate reporting duties under the Register of Overseas Entities (ROE) and other transparency requirements.