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    Please provide as much detail as possible in regards to the reason for your enquiry so our tax advisers can prepare and tailor their response to reflect your needs. We will endeavour to - respond / call you back - to discuss your enquiry and you will not be charged for this time.

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  • Non Resident Landlord Form – What You Need to Know

    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.

    Tenants and letting agents’ obligations

    For letting agents and/or tenants:

    • Form NRL4i – Application by UK letting agents to register for the non resident landlord scheme
    • Form NRL5i – Application by UK letting agents to operate the scheme by branches
    • Form NRL6i – Certificate of liability to be provided to a non resident landlord by UK letting agents or tenants
    • Form NRLY – Annual information return

    Registration

    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.

    Tax compliance

    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.

    • Form NRLY – An annual information report will need to be submitted to HMRC and the landlord by 5th July each year. This should be done using the non resident landlord form
    • Form NRL6 – A tenant or letting agent should supply the non resident landlord with a certificate of tax liability (NRL6) each year by 5th. This will cover a tax year and will contain information regarding the amount of tax paid/payable by the letting agent or tenant.

    Letting agents: Register a branch

    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.

    Non resident landlords: Applying to receive rents without deduction of tax

    For non resident landlords:

    • Form NRL1i – Application to have UK rental income without deduction of tax (individuals)
    • Form NRL2i – Application to have UK rental income without deduction of tax (companies)
    • Form NRL3i – Application to have UK rental income without deduction of UK tax (trustees)

    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.

    • An individual who receives UK rental income and lives outside of the UK for 6 months in a tax year will be considered to be a non resident landlord. Basic rate tax will be deducted from any rents received from tenants or letting agents. Form NRL1 should be completed and submitted to HMRC in order to receive rents without having tax deducted. This is usually accepted if your taxes are up to date. If HMRC accept the application form, they will write to the tenant or letting agent instructing them to withholding basic rate tax. The individual will also be required to register for self-assessment with HMRC so that they may pay UK tax on their UK rental income.
    • A company which receives UK rental income and is incorporated in a foreign jurisdiction and whose main place of business is in a foreign jurisdiction will be considered to be a non resident landlord. Basic rate tax (20%) will be deducted from any rents passed on by tenants or letting agents. Form NRL2 should be completed and submitted to HMRC in order to receive rents without having tax deducted. This is usually accepted if their taxes are up to date. If HMRC accept the application form, they will write to the tenant or letting agent instructing them to stop withholding basic rate tax. Again, the company will be required to register for self-assessment.
    • Trustees which receive UK rental income and all the trustees of a trust live outside of the UK for at least 6 months in a tax year will be considered to be non resident landlords. Again, basic rate tax (20%) will be deducted from any rents received from tenants or letting agents. Form NRL3 should be completed and submitted to HMRC in order to receive rents without having tax deducted. This is usually accepted if their taxes are up to date. If HMRC accept the application form, they will write to the tenant or letting agent to notify them to stop witholding basic rate tax. Again, the company will be required to register for self-assessment.

    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.

    Enterprise Tax Consultants can help you with the non resident landlord form

    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:

    • Advice in relation to the Non Resident Landlord Scheme
    • Advice in relation to your residence position for UK tax purposes
    • Advice on how to apply any relevant UK double taxation agreements
    • Advice in relation to your UK income, capital gains and inheritance tax exposure
    • Advice and assistance in relation to the disposal of UK residential properties and Non-Resident Capital Gains Tax.
    • Advice in relation to tax efficient structuring of your affairs when leaving the UK and when returning to the UK

    Contact us for a no-obligation initial conversation with an experienced tax adviser.