Non-resident Landlord Scheme
Non-resident Landlord Scheme
The Non-resident Landlord Scheme (NRLS) is a taxation framework designed for individuals, companies, trustees, and partnerships earning rental income from properties in the UK while residing outside the country. Key points regarding NRLS are as follows:
- Scope: NRLS applies to landlords whose ‘usual place of abode’ is outside the UK, encompassing various entities such as individuals, companies, trustees, and partnerships.
- Responsibilities:
– Letting agents managing properties for non-resident landlords are required to deduct tax from rental income and remit it to HMRC.
– Tenants may also be required to utilize NRLS, particularly if instructed by HMRC or if rental payments exceed £100 per week.
- Taxation Periods: Tax is accounted for every quarter, with periods ending on 30 June, 30 September, 31 December, and 31 March annually.
- Approval for No Tax Deduction: Landlords can seek approval from HMRC to receive rental income without tax deduction if they meet certain criteria, such as having up-to-date UK tax affairs.
- Definition of Non-resident Landlord: Non-resident landlords are those whose usual place of abode is outside the UK, determined by factors such as residence and prolonged absence from the country.
- Joint Ownership: Spouses or civil partners jointly owning UK properties may be treated as separate landlords for NRLS purposes if both have their usual place of abode outside the UK.
- Members of HM Armed Forces and Crown Servants: Individuals serving in HM Armed Forces or as Crown Servants are subject to NRLS if their usual place of abode is outside the UK.
- Rental Income: Various sources of income, including letting premises, ground rents, premiums, and more, are considered rental income under NRLS.
- Expenses: Deductible expenses incurred solely for the rental business and not of a ‘capital’ nature are eligible for deduction when calculating taxable profits.
- VAT: VAT incurred on deductible expenses may also be considered for deduction when calculating rental business profits.
How can we help?
At Prezwell, we understand the complexities of navigating tax obligations, especially concerning the Non-resident Landlord Scheme (NRLS). Our team is committed to assisting you in managing your affairs efficiently and effectively.
Whether you’re a non-resident landlord, a letting agent, or a tenant affected by NRLS, we’re here to offer our expertise and guidance. From ensuring compliance with tax regulations to optimizing deductions and allowances, we’ll work diligently to address your needs and minimize any tax burdens.
Don’t hesitate to reach out to us for personalized assistance and support with your NRLS-related matters. We’re dedicated to providing you with tailored solutions that meet your specific circumstances and help you achieve your financial goals.
