A tax return must be filed if you live outside the UK and receive rental income. Jointly owned properties require a tax return from each owner. Even if no tax is owed, this remains the case.

For those who have not yet registered for self-assessment, form NRL1i may be completed. When you submit the completed NRL1i, HMRC will not only register you, but will also notify your letting agent if you have one, or your tenant that you have been registered. Unless otherwise stated, if the letting agent/tenant is applying the rules correctly, they will deduct 20% from the tenant’s rent payment and send it to HMRC. To reclaim this deduction, you will need to file a tax return. By registering under the Non-resident Landlord scheme, you are not exempt from Income Tax; rather, the letting agent/tenant is not required to deduct tax.

Providing that the travel was “wholly and exclusively” for the purpose of the letting business, travel to the UK from abroad is an allowable expense. In the majority of cases, this does not apply if you have appointed a letting agent to manage the property on your behalf. According to HMRC, if you have a letting agent managing your property, the property is managed from their place of business. So only the travel to the rental property from the letting agent’s office is covered in this instance.

If you do not use a letting agent, your costs of travelling to the UK in order to manage the property or take care of other aspects of letting may be eligible for reimbursement. Your visit is not tax deductible if there is a “duality of purpose” and a private element to your travels.

Example 1
You come to the UK for two weeks. In addition to handling a changeover of tenants, you also visit friends and family. Under the duality of purpose rules, the entire travel cost would be disallowed.

Example 2
You visit the UK for two days. During that time, you only handle letting-related matters, such as the changeover of new tenants. In addition to staying in a hotel, you also go for a meal. Then you return home. As long as you keep receipts for travel, accommodation, and meals, you can claim them as expenses.

Income derived from rental properties in the UK is taxed in the UK. The UK personal tax allowance may be available to you depending on your nationality and where you live. Additionally, your country of residence may tax your UK rental income. For this reason, we recommend that you consult a qualified adviser in your country of residence.

Many countries have double tax treaties with the UK, allowing for tax relief from double taxation. Rent from the UK, however, is normally subject to tax in the UK as well as where you reside. Tax treaties between the UK and other countries may exempt some UK income from UK taxation.

Persons whose “usual place of abode” is outside the UK can be taxed on their UK rental income under the Non-Resident Landlord Scheme. HMRC requires non-resident landlords to register under the Non-Resident Landlord Scheme. You can now complete this online using form NRL1i. Once you have registered, HMRC will issue you with your self-assessment unique tax reference (UTR) so that you can file your tax returns. Upon registering with HMRC, your letting agent or tenant will also be notified.

In the absence of registration, your letting agent or tenant is required to deduct 20% of the rent received and pay it to HMRC. Upon filing your tax return, you will be able to claim a refund for the deduction. If you register as a non-resident landlord, you’re still subject to Income Tax, but letting agents and tenants do not have to deduct it.

If you are a non-resident and your estate exceeds £325,000 less any gifts made in the last seven years, you are subject to UK inheritance tax.

Those with a non-domicile status in the UK will only be liable for inheritance tax on their UK-based assets.

Definitely. A CT600 return is required under the corporation tax system for non-resident landlord companies.

Please see our guide to non resident landlord corporations for more information.

Each year, residency is considered based on where you live on a daily basis. UK tax purposes determine your residency based on the Statutory Residence Test.
A domicile is the intention to live permanently in a country rather than to live there temporarily.

For more detailed guidance please see our residency vs domicile guide.

For tax years 2021/22 to 2025/26, the UK’s personal tax allowance is £12,570. Any UK income is eligible for this tax allowance if you are a British national no matter where you live. The same tax allowances and reliefs may be available to you as a resident of a country within the European Economic Area (EEA). Below is a list of the countries that are part of the EEA;
In addition to Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, and Liechtenstein. The Baltic States, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

Furthermore, you will also be entitled to a personal allowance if you are

A Jamaican or Israeli national.

Or

A resident AND a national of,
Argentina, Australia, Azerbaijan, Bangladesh, Belarus, Bolivia, Bosnia and Herzegovina*, Botswana, Canada, Cote d’Ivoire, Croatia*, Egypt, Gambia, India, Indonesia, Japan, Jordan, Kazakhstan, Korea, Lesotho, Malaysia, Malta, Montenegro*, Morocco, New Zealand, Nigeria, Oman, Pakistan, Papua New Guinea, Philippines, Romania, Russian Federation, Serbia,*, South Africa, Sri Lanka, Sudan, Switzerland, Taiwan, Tajikistan, Thailand, Trinidad & Tobago, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, Uzbekistan, Venezuela, Vietnam.
(*Until a new agreement takes effect, entitlement to benefits is protected under the UK’s Double Taxation Treaty with the former Yugoslavia).

Prior to 5th April 2015, non-residents did not pay Capital Gains Tax. From 6 April 2015, all non-residents will need to pay Capital Gains Tax and from 6 April 2019, all gains on commercial property will be subject to Capital Gains Tax. It is possible to substitute the market value at the relevant date for the original cost of residential or commercial property that was owned on 5th April 2015 or 5th April 2019 respectively.

For example,
In 2000, Shane purchased a £500k investment flat in Kensington. The flat was valued at £1.5m when Shane left the UK on 5th April 2015. The flat now has a current value of £2m, and Shane is considering selling it. Shane would normally have a gain of £1.5m (£2m less £500k.) He could now choose to use the value as of 5th April 2015 as his base cost. As a result, his gain would be £2m less £1.5m. This reduces his gain by £1m.
HMRC must be notified of the gain within 30 days of the sale’s completion. Capital gains tax on this must also be paid within 30 days.

The 3% higher rate SDLT will apply to you if you own another property, whether it is in the UK or not.

As of 6th April 2020 you are now required to file an online disclosure and pay any CGT within 30 days.

Please see the following guide on non resident capital gains tax  for more details.

There is no longer a simple matter of limiting your stay in the UK to a few days. Considering the complexity of this matter, we recommend you seek professional advice. See our statutory residency test guide for more information.

When you move in or out of the UK, the tax year is usually split into 2 – a non-resident part and a resident part. This means you only pay UK tax on foreign income based on the time you were living here. This is called ‘split-year treatment’.

For more detailed guidance on this please see our split year treatment article.

The Statutory Residency Test (SRT) allows you to work out your residence status for a tax year. Each tax year is looked at separately, so you may be resident in the UK in one year but not the next, or vice versa.

The SRT takes into account the amount of time you spend and, where relevant, work in the UK along with any ties you have to the UK.

This can be complicated and you should seek professional advice if in doubt. For more detailed guidance please see the Statutory Residency Test (SRT) tax guide.