Renting out your UK home: the NRL Scheme

Move abroad and let the house, and the taxman expects his cut before the rent even reaches you. Fill in one form and you can usually change that.

The short version

If your usual home is outside the UK, your letting agent (or a tenant paying more than £100 a week) must normally take basic rate tax off your rent and pay it to HMRC each quarter [1][3].
You can apply to HMRC on form NRL1 to receive the rent with no tax taken off. Approval is usually given if your UK tax affairs are up to date [2][3].
Gross payment isn't a tax exemption. You still declare the rent on a Self Assessment return every year and pay what's due [4].
From 6 April 2027, property income gets its own tax rates, and the deduction under the scheme will follow the new property basic rate [5][6].
Letting in England now also means the Renters' Rights Act rules that came in on 1 May 2026 [8].

Who counts as a non-resident landlord

The scheme isn't built on the Statutory Residence Test. It uses an older idea: your "usual place of abode". For individuals, HMRC normally treats you as having your usual place of abode outside the UK if you're away for six months or more [3]. That means you can be a non-resident landlord for this scheme while still being UK tax resident, and the other way round.

It covers individuals, companies (which have their own rules) and trustees. Joint owners are treated separately: if you own the house with your partner, each of you is a landlord for your own share [1].

Who takes the tax off

The scheme puts the job on whoever handles the money in the UK.

Who pays you	Do they have to deduct tax?
A letting agent who collects the rent	Yes, whatever the rent, unless HMRC has told them in writing to pay you gross [1]
A tenant paying direct, more than £100 a week	Yes [1][3]
A tenant paying direct, £100 a week or less	No, unless HMRC tells them to [3]
A friend or relative who collects rent for you	They count as an agent if they receive the rent or control where it goes [1]
A tenant-finding agent	Not if they keep their fee for no more than three months and the tax due is no more than £100 [1]

Agents register with HMRC on form NRL4 [1]. Each quarter they add up the rent, take off allowable expenses they paid (repairs, their fees, insurance they arranged), and pay basic rate tax on the rest within 30 days of the quarter end: 30 June, 30 September, 31 December and 31 March [1]. They account for it on a quarterly NRLQ return, then send an annual NRLY return by 5 July and give you an NRL6 certificate showing the tax they paid on your behalf [1][4]. Keep that certificate safe. It's your proof when you claim the tax back as a credit on your own return.

Your brother who pops round to collect the rent and fix the boiler? Under the scheme he may be your agent, with the paperwork that goes with it. Worth a chat over a pint before he agrees.

Getting your rent paid gross: form NRL1

Most Brits abroad are better off applying for approval to receive rent without deduction. The tax taken off at source is often more than you'd owe, because the agent can't take account of your personal allowance or mortgage interest, so you end up waiting for a refund.

The forms are [3]:

NRL1 for individuals
NRL2 for companies
NRL3 for trustees

HMRC will usually approve you if your UK tax affairs are up to date, if you've never had any UK tax obligations, or if you don't expect to owe UK tax for the year you apply [3]. Approval doesn't depend on a big tax bill or a small one. It depends on whether HMRC trusts you to file.

How to apply, step by step

Time it. You can apply up to three months before you leave. If you've already gone, apply now [3].
Choose a route. Apply through HMRC's online service (you can't save a half-finished form, so have everything ready), or print, sign and post the NRL1 [2].
Using an accountant? They can't use the online service for you. They send a paper NRL1 with form 64-8, which authorises them to deal with HMRC on your behalf [2].
Name your agent or tenant. HMRC writes to you with an approval reference, and separately to each letting agent or tenant you list, telling them to pay you gross [2].
Check the date. Approval usually runs from the first day of the quarter in which HMRC received your application [2]. Until the agent hears from HMRC, they must keep deducting.

HMRC carries out an initial check before approving, then a more detailed one later. If it refuses, or later withdraws approval, you can appeal in writing within 90 days [2][3].

Your Self Assessment return

Approval registers you for Self Assessment [3]. From then on you send a return each year with the UK property pages (SA105), plus the residence pages (SA109) if you're claiming non-residence. The online deadline is 31 January after the end of the tax year, so 31 January 2027 for 2025/26.

A few points that catch people out:

The personal allowance. British citizens can usually keep the personal allowance as non-residents, so a modest rent may leave little or no tax to pay. That's exactly why having 20% taken off at source stings.
Mortgage interest. For residential lets you don't deduct mortgage interest as an expense. You get a tax credit at the basic rate instead.
Tax already deducted. If you weren't approved for part of the year, enter the tax shown on your NRL6 so it counts against your bill [1].
Making Tax Digital. Since 6 April 2026, landlords and sole traders whose qualifying income (gross rent plus self-employed turnover) was over £50,000 must keep digital records and send quarterly updates. The threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028 [7]. HMRC's guidance doesn't spell out how non-residents fit in, so check before your income gets near the line.

The country you now live in may want to tax the same rent too. A double taxation agreement usually lets the UK tax UK property first and the other country give credit. A tax adviser who knows both countries can check how the two fit for you.

What changes in April 2027

At the November 2025 Budget, the government announced separate tax rates for property income from 6 April 2027 in England, Wales and Northern Ireland, and said the deduction under the Non-Resident Landlord Scheme would be changed to match the new property basic rate [5]. The Budget 2026 rates annex, published on 28 October 2026, lists the 2027/28 property rates as [6]:

Rate	2026/27	2027/28
Property basic rate	20% (main rate)	24%
Property higher rate	40% (main rate)	44%
Property additional rate	45% (main rate)	49%

The 2025 announcement was 22%, 42% and 47%; Budget 2026 raised those figures, so treat them as announced rather than settled until HMRC updates its scheme guidance. If your agent still deducts tax, expect the quarterly deduction to rise from April 2027. One more reason to get your NRL1 sorted.

The letting side: rules that apply to every landlord

The tax scheme is only half of it. In England, the Renters' Rights Act 2025 changed the rules for all private landlords on 1 May 2026 [8]:

Section 21 "no fault" evictions have gone. Tenancies are now periodic, with no fixed end date.
To get the house back to sell it or move back in, you use a section 8 ground. You can't use it in the first 12 months of a tenancy, and notice is usually four months [8].
Rent can go up only once a year, with at least two months' notice on Form 4A [8].
You can't take bids above the advertised rent, ask for rent before the agreement is signed, or turn away tenants because they have children or claim benefits [8].
Existing tenants had to receive the government's information sheet by 31 May 2026 [8].

That matters if you're planning to come home in a couple of years. You can no longer count on a fixed term ending neatly before your flight lands. Scotland, Wales and Northern Ireland have their own tenancy laws.

Our guide on keeping your UK home or selling it before you go covers mortgage consent, gas safety, deposits and the EPC. And our community groups for Brits abroad are full of people letting a semi in Swindon from somewhere sunnier.

Renting out your UK home from abroad: the Non-Resident Landlord Scheme