Lovin’ this article, but need more advice on your tax affairs?
Get in touch today.
What are the various types of non resident landlord form and how should they be used?
Letting agents and tenants will have numerous obligations in relation to deducting tax from rental payments to their non resident landlords. These persons may need to register for the non resident landlord scheme, register for self-assessment along with making an annual information return and providing the non resident landlord with a certificate of tax liability.
The non resident landlords may also apply to receive rents without having any income tax deducted. In which case, they will need to make an application to HMRC and register for self-assessment.
HMRC provide numerous non resident landlord forms allowing the relevant parties to meet their filing and notification obligations. A summary of the forms are as follows:
|Form||Person responsible for submitting||Description|
|NRL1i||Non resident landlord individual||Application to have UK rental income without deduction of basic rate tax|
|NRL2i||Non resident landlord company||Application to have UK rental income without deduction of basic rate tax|
|NRL3i||Non resident landlord trustee||Application to have UK rental income without deduction of basic rate tax|
|NRL4i||Letting agent||Application by letting agents to register for the NRL Scheme|
|NRL5i||Letting agent||Application for letting agent to operate non-residents landlord scheme by branches|
|NRL6i||Letting agent or tenant||Certificate of liability|
|NRLY||Letting agent or tenant||Annual information return|
The non resident landlord form can be filled in and submitted online (with a government gateway account). Alternatively, these can be filled in online and printed.
For letting agents and/or tenants:
A tenant or letting agent who is passing rent to a non resident landlord is to register with HMRC within 30 days.
A letting agent is required to use Form NRL4i.
Tenants are not required to submit any forms. If you are a tenant, you should write to HMRC giving your name and address and that of your landlord and state that you wish to register for the non resident landlord scheme.
Payment of any tax due will need to be made by the tenant or letting agent within 30 days of the end of each tax quarter – 30th June, 30th September, 31st December and 31st March.
Where lettings agents have a number of branches, they may apply to register each branch as a separate letting agent. This is only the case if the branches deal with an average of 5 or more non resident landlords each. i.e. a lettings agent with 5 branches must deal with 25 non resident landlords.
Form NRL4 should be completed to apply for registration of individual branches.
For non resident landlords:
A non resident landlord who wishes to apply to opt out of the non resident landlord scheme should submit the appropriate non resident landlord form – forms NRL 1, NRL 2 or NRL 3 – where you are a non resident individual, company or trustee respectively.
The non resident landlord forms 1 to 3 should be filled by landlords who, under the non resident landlord scheme, are having UK basic rate tax deducted from their rental income. This tax is deducted by the letting agent or tenant prior to passing on the rental proceeds.
Generally speaking, HMRC will accept an application to receive rents gross where there are no outstanding taxes, penalties or interest. The burden of administration and self-assessment would be place on the non resident landlord.
However, one also receives the cash flow advantage from receiving rental proceeds gross. Also, a non resident landlord may be taxed twice on the same income. One from his/her jurisdiction of residence and one by the UK’s non resident landlord scheme.
There are often agreements in place between two or more jurisdictions which determine who has ‘taxing rights’. These agreements are made by way of a ‘double tax’ treaty. The taxation of such income will depend on the provisions within those treaties.
If you are unsure as to which non resident landlord form you are required to complete and submit, we can assist. The services we are able to offer include: