Moving abroad does not take your UK rental income out of UK tax. Unless HMRC approves you to receive rent gross, your letting agent (or in some cases your tenant) must hold back basic rate tax under the Non-Resident Landlord Scheme. You still file a Self Assessment return each year, and when you sell, a separate 60-day reporting rule applies.
Who counts as a non-resident landlord
The scheme looks at your usual place of abode, not your tax residence. HMRC normally treats an individual who is away from the UK for six months or more as having a usual place of abode abroad, so you can fall within the scheme even in a year when the statutory residence test still makes you UK resident. Our guide to residence and domicile explains the residence side.
Joint owners are treated separately: if only one spouse lives abroad, the scheme covers only that spouse's share.
How the scheme works
- Letting agents must operate it whatever the rent, unless HMRC has told them in writing that you can be paid gross.
- Tenants who pay you directly must operate it if the rent is more than £100 a week. Below that, they only need to if HMRC tells them to.
- Tax is worked out each quarter (to 30 June, 30 September, 31 December and 31 March) on the rent less deductible expenses the agent or tenant has paid, at the basic rate of income tax, currently 20%, and is due to HMRC within 30 days of the quarter end.
- By 5 July each year the agent or tenant files an annual return (form NRLY) and gives you a certificate (form NRL6) showing the tax deducted. You claim that tax back as a credit on your return.
The deduction is a payment on account, not your final bill. Costs you pay yourself, such as mortgage interest, are ignored, so it often overpays.
Applying to receive rent gross with form NRL1
Individuals can apply to HMRC, online or on form NRL1, to receive rent with no tax deducted. HMRC will usually approve you if your UK tax affairs are up to date, or if you have never had UK tax obligations, or if you do not expect to owe UK tax for the year of the application. Approval usually runs from the start of the quarter HMRC received the form. Each joint owner needs a separate application.
Gross does not mean tax-free: you pay through Self Assessment instead, and HMRC can withdraw approval if returns or payments fall behind.
Your tax return and personal allowance
Most non-resident landlords must still file a Self Assessment return, with the property pages and the SA109 residence pages. HMRC's own free online service does not cover non-residents, so in practice the return goes in through commercial software or on paper, and paper returns are due by 31 October rather than 31 January. See the 31 January 2027 deadline.
Non-residents only get the £12,570 personal allowance if they qualify. The main groups are UK nationals, nationals of an EEA state, people resident in the Isle of Man or the Channel Islands, and current or former Crown servants. Others may qualify under the double tax agreement with their country of residence. You claim it on the SA109 (or on form R43 if you do not file a return).
Example. A UK national living abroad has net rental profit of £18,000 in 2026/27 and no other UK income. Her agent withholds 20% of £18,000, which is £3,600. Her actual liability after the personal allowance is (£18,000 less £12,570) at 20%, which is £1,086, so she can reclaim £2,514 through her return.
Rates from April 2027, finance costs and double tax
From 6 April 2027 rental profit is taxed at its own rates of 22%, 42% and 47%. Finance Act 2026 applies these to non-resident individuals as well. In the example above, the same profit in 2027/28 would cost £1,194.60. See our guide to the April 2027 property income rates.
Mortgage interest works as it does for UK residents: no deduction from rental profit, but a tax credit at 20%, rising to 22% from 2027/28.
Your country of residence may also tax the rent. Most double tax agreements leave the first right to tax UK property income with the UK, and the other country then gives credit for UK tax paid. Mismatched tax years or expense rules can still leave you paying twice, which is where our international tax work usually starts.
Selling, inheriting and buying
- Capital gains tax. Non-residents have paid UK tax on gains from UK residential property since 6 April 2015, and on all UK land and property since 6 April 2019. You must report the sale to HMRC within 60 days of completion, even if no tax is due, and pay any tax in that window. Rates for individuals in 2026/27 are 18% and 24%.
- Rebasing. If you owned the property on the relevant date you can usually work out the gain from its value at 5 April 2015 (residential) or 5 April 2019 (non-residential), or elect to use the whole-period gain. For residential property held at 5 April 2015 you can also time-apportion the gain. The choice can matter a great deal.
- Coming back early. If your period of non-residence lasts five years or less, and you were UK resident in at least four of the seven tax years before you left, gains on assets you owned before departure can be taxed in the year you return.
- Inheritance tax. UK property is within inheritance tax whatever your residence or domicile. Leaving the UK does not remove it from your estate.
- Companies and buying. The annual tax on enveloped dwellings applies to companies holding UK homes worth over £500,000, not to individuals. Non-UK resident buyers of residential property in England and Northern Ireland pay a 2% stamp duty land tax surcharge.
What to do now
- Check your status under the scheme when you leave, and tell your agent and HMRC.
- Decide whether to apply on form NRL1 to be paid gross, rather than accepting deductions by default.
- Keep every NRL6 certificate and claim the tax withheld, and the personal allowance, on your return.
- Plan for the 2027 rate rise before 5 April 2027, for example the timing of repairs. See our pre-Budget checklist.
- Plan any sale early: get a rebasing valuation and diarise the 60-day deadline.
- Review your will for inheritance tax on UK property.
If you are planning a move, see leaving the UK and our page for people moving to or from the UK. To review your position, book a consultation.
This article is general information about UK tax, based on the law and HMRC practice at the date shown above. It is not advice, and reading it does not make you our client. Tax rules change and their effect depends on your circumstances, so please speak to us before acting on it.