Terminology Explained

NRLS

Non-resident landlords scheme is a scheme for taxing the UK rental income of landlords who live outside of the UK. The scheme requires UK letting agents to deduct basic rate tax from any rent they collect for non-resident landlords. If non-resident landlords don't have UK letting agents acting for them, and the rent is more than £100 a week, their tenants must deduct the tax. When working out the amount of tax the letting agent/tenant can take off deductible expenses.

Letting agents and/or tenants don't have to deduct tax if the Inland Revenue tells them not to. The Inland Revenue will tell an agent/tenant not to deduct tax if non-resident landlords have successfully applied for Approval to receive rents with no tax deduction. But even though the rent may be paid with no tax deducted, it remains liable to UK tax. So non-resident landlords must include it in any tax return to the Inland Revenue.