NRL1: receiving UK rent without tax deducted when you live abroad

Who needs it

• Individuals who let UK property and live abroad for 6 months or more a year, which makes them non-resident landlords under the scheme even if they're UK resident for tax.
• Landlords whose letting agent, or tenant, is deducting tax from the rent and who would rather pay through Self Assessment.
• Individuals only: companies apply on NRL2 and trustees on NRL3.

What you need before you start

• Your principal residential address abroad. HMRC accepts a correspondence address if you only have a 'care of' or PO Box address, with an explanation.
• Your UTR if you have one, and your National Insurance number if you have one.
• The names, addresses and any reference numbers of your letting agents or tenants.
• HMRC sign-in details to apply online, or a printer and your signature for the postal form.

How to file NRL1

1. 1Make sure your UK tax affairs are up to date. HMRC won't approve an application if they aren't.
2. 2Apply online using the NRL1 service, signing in or creating sign-in details. You can't save the postal form part-way, so gather everything first if you use it.
3. 3If a tax agent is acting for you, don't use the online service. Fill in the postal form, have it signed by you as the landlord, and send it with a 64-8 to the address on the form.
4. 4Wait for HMRC's checks. It may ask for more information, and approval can be withdrawn if you don't provide it.
5. 5Once approved, HMRC sends notices to you (or your agent) and to the letting agents or tenants you named, with an approval reference. They then stop deducting tax.

How the Non-Resident Landlord Scheme works

If you live abroad for 6 months or more a year, HMRC classes you as a non-resident landlord. Your UK letting agent deducts basic rate tax from the rent after allowing for expenses they've paid, and pays it to HMRC each quarter. With no letting agent, a tenant paying over £100 a week must deduct it.

Each year, by 5 July, the agent or tenant sends HMRC an annual return and gives you an NRL6 certificate showing the tax deducted.

What approval changes

HMRC normally approves an application that is complete and correct, where it's satisfied you'll meet your UK tax obligations. Once it tells the agent or tenant in writing that you can receive the rent with no tax deducted, they pay you the rent in full.

Approval usually takes effect from the first day of the quarter in which HMRC received your application. If HMRC refuses, you can appeal in writing within 90 days of the refusal notice.

You still file a tax return

Approval moves when you pay, not whether you pay. You declare the rental income on a Self Assessment return unless HMRC tells you not to, and pay any tax due by the normal deadlines.

If your rental income is below your Personal Allowance and tax was deducted, HMRC's guidance on rent for people living abroad explains how to claim it back.

Common mistakes

• Applying with tax returns outstanding. HMRC doesn't approve applications where your UK tax affairs aren't up to date.
• Assuming approval means no return. You still declare the rent on a Self Assessment return, with the SA105 property pages and usually SA109 residence pages, unless HMRC tells you not to.
• Using the online service when an agent acts for you. HMRC asks for the postal NRL1 with a 64-8 in that case.
• Forgetting to name every letting agent and tenant. HMRC sends the approval notice to the ones you list.