Tax on your UK income if you live abroad
You need to pay tax on your rental income if you rent out a property in the UK.
You may also need to pay tax if you make a gain when you sell property or land in the UK.
If you live abroad for 6 months or more per year, you’re classed as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC) - even if you’re a UK resident for tax purposes.
How you pay tax
You can get your rent either:
- in full and pay tax through Self Assessment - if HMRC allows you to do this
- with tax already deducted by your letting agent or tenant
Get your rent in full
If you want to pay tax on your rental income through Self Assessment, fill in form NRL1i and send it back to HMRC.
If your application is approved, HMRC will tell your letting agent or tenant not to deduct tax from your rent and you’ll need to declare your income in your Self Assessment tax return.
HMRC will not approve your application if your taxes are not up to date, for example you’re late with your tax returns or payments.
Get your rent with tax deducted
Your letting agent or tenant will:
- deduct basic rate tax from your rent (after allowing for any expenses they’ve paid)
- give you a certificate at the end of the tax year saying how much tax they’ve deducted
If you do not have a letting agent and your tenant pays you more than £100 a week in rent, they’ll deduct the tax from their rent payments to you.
Filling in your tax return
You need to declare your rental income in a Self Assessment tax return unless HMRC tells you not to.
You cannot use HMRC’s online services. Instead, you need to:
- send your tax return by post
- use commercial software
- get help from a professional, like an accountant
You need to complete the ‘residence’ section (form SA109 if you’re sending it by post) and the ‘property’ section (form SA105).
You’ll be fined if you miss the deadline - it’s earlier if you’re sending your return by post (31 October).
If you’ve paid too much tax
You can ask for a refund if both:
- your rental income is lower than your Personal Allowance
- your letting agent (or tenant) already deducted basic rate tax on it
Fill in form R43 and send it back to HMRC.
You cannot ask for a refund if you’re not eligible for a Personal Allowance.
Companies and trusts
A company is a ‘non-resident landlord’ if it receives income from renting UK property and either:
- its main office or business premises is outside the UK
- it’s incorporated outside the UK
Your company will get its rent in full if it’s resident in the UK for tax purposes - this includes UK branches of companies based abroad if they’re registered for Corporation Tax.
A trust is a ‘non-resident landlord’ if it receives income from renting UK property and all trustees usually live outside the UK.
Apply to get your rent in full
Companies should use form NRL2i to ask HMRC to get rental income in full. Trusts should use form NRL3i.