What is the Non-Resident Landlord Scheme (NRLS)?

The NRLS is a scheme to tax the UK rental income of persons who have a usual place of abode outside the UK – known as non-resident landlords. The NRLS imposes obligations on the tenant or the letting agent (if there is one).

The law requires you to comply with a number of obligations under the NRLS (known as ‘operating’ the NRLS) if:

  • you pay rent directly to a landlord who has their usual place of abode outside the UK (or to some other intermediary who is not a UK letting agent) and
  • you pay the landlord more than £100 a week in rent.
  • You may also be required to operate the NRLS if HMRC specifically asks you to do so.

Tenants or letting agent have the right to deduct any tax they have to pay under the NRLS from their rent, or from any other money owing to the non-resident landlord. They also have the right to recover from the landlord any tax they have to pay under the scheme where they did not deduct it from their rent or other money owing.

If your place of residence is in Hong Kong and you want a property in the UK for buy-to-let, then your tenant or the letting agent who assists you in handling rental income will have the above responsibilities to deal with you the UK rental income tax.

As a landlord, you can apply online or by post via form NRL1 to receive your rental income gross. Then, you simply would report your rental income and expenses on a UK Self Assessment tax return and so the tax would be calculated by net income rather than 20% basic rate of rent under the NRLS tax.

Bee City Living Leasing can assist our landlords to handle NRL1, where we handle everything from finding exemplary tenants, looking after the property during the tenancy, and sorting out everything at the end. Our Fully Managed service offers the best value for money, and there’s nothing we can’t help you with!

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