Non-UK resident individuals or companies that own property in the UK are subject to UK tax on their rental income. This is referred to as Non-Resident Landlord Scheme (NRLS). The specific rules and tax rates might vary depending on various factors, including the tax treaty between the UK and the non-resident’s country of residence.
The rental income is subject to UK income tax. The tax is charged at progressive rates of 20%, 40%, and 45% depending on the level of income.
The rental income is subject to UK corporation tax at rate of 25%.
  1. When a tenant pays rent to a landlord who lives abroad, the tenant (or their letting agent) needs to operate the NRL Scheme. They should deduct basic rate tax from the rent (after taking off any allowable expenses). The tax deducted is a payment on account of the landlord’s tax liability.
  2. Non-UK residential landlords can apply to receive rent with no tax deducted. If the application is approved, the tenant or letting agent will be authorized to pay the rental income without with holding tax. However, even in this case, the rental income remains taxable, and the landlord has to include it in their UK tax return.
Upon the sale of UK property by a non-resident, capital gains tax may apply. From April 2019, non-UK residents have been required to pay tax on all disposals of UK property or land, whether residential or commercial.
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