Non-Resident Landlord Scheme – What Is It and What Should You Know About It?
Non-Resident Landlord Scheme Explained
You may have heard the term Non-Resident Landlord Scheme, or NRLS, and wondered how it impacts you. Depending on each specific situation, this tax on rental income payment scheme can apply to landlords, tenants, and letting agents.
Although, like anything having to do with the state, it may sound complicated, our team at REMAX Star Canning Town – made up of NRLS-registered estate agents, can help you understand everything there is to know about the NRLS and how we can take on all the obligations that may apply to you.
To learn more about how we can help, do not hesitate to contact us at 0207 055 0441, or to book an appointment to see us.
What is a Non-Resident Landlord?
For the purposes of the Non-Resident Landlord scheme, a non-resident landlord is an individual renting out a property in the UK and receiving rental income from it whose usual place of abode is outside the UK. Specifically, the scheme refers to landlords who live outside the UK for more than 6 months every year.
A non-resident landlord may also be a company, a partnership, or a trustee.
For partnerships, each partner is considered a separate landlord as regards their share of the rental income. For properties owned by more than one individual, the NRLS applies to each owner’s rental income share.
Please note that you can be a non-resident landlord under the NRLSand still be considered a UK tax resident for tax purposes.
What is the Non-Resident Landlord Scheme (NRLS)?
The Non-Resident Landlord Scheme (NRLS)refers toa tax on UK rental income that applies to non-resident landlords, their tenant(s), or letting agents.
To put it simply, the Non-Resident Landlord Scheme defines how tax is applied to income obtained from renting a UK property when the property owner lives overseas for more than 6 months out of a year.
To ensure that the due tax is paid, the HM Revenue & Customs (HMRC) imposes the obligation to withhold the tax on the landlord’s UK letting agent or their tenant when they pay more than £100 a week in rent for the property.
For the NRLS, the tax year is considered to run from April 1st to March 31st.