10 min read
Owning a rental property in the UK while living abroad brings a set of tax obligations that catch a lot of people off guard. In some cases, tax is already being deducted from your rent without you having set anything up. In others, landlords are paying more than they need to because they have never filed a return. This guide covers the key things you need to know, including who needs to file, what you can claim, how Making Tax Digital affects you, and what happens if deadlines are missed.
Are you a non-resident landlord?
HMRC considers you a non-resident landlord if your main home is outside the UK. Most people have heard the 183-day rule, spend fewer than 183 days in the UK in a tax year and you are non-resident. In practice it is more complicated than that. The UK Statutory Residence Test looks at a range of factors, and in some circumstances UK residence can be established at far fewer days depending on your ties here. Keep a running note of your UK travel dates as you go, trying to piece them together at the end of the year is a headache you can easily avoid.
Do you need to file?
Two things determine this: what you earn from the property, and whether tax is already being dealt with through the Non-Resident Landlord Scheme.
You must file a return if:
- Your rental income after expenses exceeds £2,500
- HMRC writes to you and asks for one
- You want to claim expenses against your rental income
If your income is under £1,000, there is no tax to pay, though it is still worth registering with HMRC. Between £1,000 and £2,500, call HMRC to find out where you stand. Over £2,500 after expenses, a return is required.
If your agent or tenant is already deducting tax through the NRLS and your income is below the thresholds, you may not need to file. But it is often worth doing anyway and if your costs are significant, there is a good chance you have overpaid, and a return is the only way to get that money back.
The Non-Resident Landlord Scheme
The NRLS is how HMRC collects tax from landlords who live abroad. Once registered, your letting agent or tenant is legally required to take 20% tax off your rent before it reaches you. A lot of landlords do not realise this is happening until they look into it properly.
If you would rather receive your rent in full and handle the tax yourself at year end, you can apply to HMRC to be paid gross. The form you need depends on your situation, NRL1 if you are an individual, NRL2 for an overseas company, NRL3 for a non-resident trust. The approval process takes around 90 days. Once it comes through, you sort everything via Self Assessment. For landlords with real costs to offset, this usually works out cheaper than having 20% taken off every month.
Why filing a return is often worth it
Even if filing is not strictly required, there are good reasons to do it.
You can claim expenses. Repairs, letting agent fees, management costs, council tax and utilities where you pay them, these all reduce the income you are taxed on. Mortgage interest is still claimable, though since April 2020 it has been restricted to a 20% tax credit rather than a straight deduction.
You stay in control. When tax is deducted at source, you are relying on someone else to get it right. Filing your own return means you know exactly what has been paid and why, and you can adjust for changes in costs or rent without waiting for someone else to act.
You can claim double taxation relief. The UK has agreements with over 130 countries, including the US, Australia, UAE, Canada and most of Europe, that prevent the same income being taxed twice. You claim that relief through Self Assessment. Without it, you could end up paying tax on the same money in both countries.
Making Tax Digital
MTD for Income Tax changes how landlords above certain income levels report to HMRC. Instead of one return a year, you keep digital records using HMRC-approved software and send quarterly updates, with a final declaration at year end.
The income thresholds are based on gross rental income before expenses:
- From 6 April 2026 — over £50,000
- From 6 April 2027 — over £30,000
- From 6 April 2028 — over £20,000, though HMRC has not yet formally confirmed this threshold
Non-resident taxpayers who filed SA109 residence status pages with their 2024/25 tax return will automatically get a one-year deferral from MTD for Income Tax. If you expect to need SA109 in 2026/27 but did not file it in 2024/25, you may be able to apply to HMRC for a deferral.
Individuals without a UK National Insurance number are automatically exempt from MTD for Income Tax. HMRC’s latest guidance no longer specifies a cut-off date, so the exemption is generally expected to apply where no NI number has been issued by the relevant MTD start date.
For those who are in scope, the quarterly deadlines for 2026/27 are:
- 6 April to 5 July 2026 — submit by 7 August 2026
- 6 July to 5 October 2026 — submit by 7 November 2026
- 6 October to 5 January 2027 — submit by 7 February 2027
- 6 January to 5 April 2027 — submit by 7 May 2027
The final year-end declaration for 2026/27 is due by 31 January 2028. Mortgage interest still has to be recorded separately under MTD, that restriction has not changed.
Missing deadlines
HMRC issues a £100 penalty the day after a filing deadline is missed, even if no tax is owed. Leave it three months and daily £10 charges start. Further penalties follow at six and twelve months. Interest runs on unpaid tax from the payment date. The longer it sits unresolved, the more it costs, and the more likely HMRC is to look more closely at your affairs.
What you need before you can file
- A Unique Taxpayer Reference, if you do not have one, apply on the HMRC website
- A Government Gateway account
- Income records for 2025/26 and ongoing records for 2026/27
- Receipts and invoices for anything you plan to claim
- Your letting agent’s details if they have been handling NRLS deductions
- Any double taxation paperwork if you are claiming treaty relief
A UK National Insurance number is not a requirement for non-resident landlords, but it makes dealing with HMRC easier and it determines whether MTD applies to you.
Deadlines to know
The 2025/26 tax year ended on 5 April 2026. The 2026/27 tax year runs until 5 April 2027.
For 2025/26:
- Register for Self Assessment if you are new to it — 5 October 2026
- Paper return deadline — 31 October 2026
- Online return and payment — 31 January 2027
If you have not yet filed your 2024/25 return and the deadline, 31 January 2026 has already passed. A £100 penalty will have been issued automatically. File as soon as you can to stop further charges building up.
For non-resident landlords with a UK NI number, MTD is mandatory from 6 April 2027 for income over £50,000, and from 6 April 2028 for income over £30,000.
Forms you will need
- SA100: The main Self Assessment return, everyone needs this
- SA105: Where you record UK property income and expenses
- SA109: Where you confirm non-resident status and claim treaty relief
FAQs
1. Do I pay UK tax if I live abroad?
Yes. Where you live affects how the tax is collected and whether a treaty reduces the amount, but the liability on UK rental income does not go away because you are overseas.
2. My agent deducts tax already, do I still need to file?
Not necessarily, but HMRC can ask for a return regardless. If you have expenses that have not been offset, filing will almost certainly save you money.
3. When is the filing deadline for 2025/26?
Online returns are due by 31 January 2027. Paper returns by 31 October 2026. Though there is nothing stopping you from doing it now!
4. I missed the 2024/25 deadline, what now?
File as soon as possible. The £100 penalty is already there and further charges are building. Getting it in stops the clock.
5. I started renting in 2025/26, where do I begin?
Register with HMRC by 5 October 2026, keep clear records of everything coming in and going out, and file online by 31 January 2027.
6. Does MTD apply to me?
If you do not have a UK NI number, no. Well certainly not at the moment but keep an eye on this. If you do, and your gross income is above £50,000, it applies from April 2027 for you as a non resident landlord. The £30,000 threshold comes in April 2028, dropping to £20,000 in 2029.
To sum up
The 2025/26 tax year is done and the window to file is open. If you had rental income that needs reporting, now is a good time to get your records in order as the 31 October 2026 paper deadline and 31 January 2027 online deadline are closer than they seem. If 2024/25 is still outstanding, sort it now before the penalties go further. And if you are heading toward the MTD thresholds, the 2026/27 tax year, which runs to 5 April 2027, is the one to get right, with the final declaration due 31 January 2028.
We work with non-resident landlords on UK property tax every day. If you want to talk through your position, get in touch for a free consultation.
Anthony Burrell is the Tax Director at Golding Accountancy, specialising in UK personal tax, compliance, and strategic tax planning. He works with business owners, landlords, and property investors across the UK, helping them navigate complex tax legislation while ensuring they remain compliant and tax-efficient. Outside the office, Anthony is a dedicated West Ham supporter and has been a season ticket holder for more than 40 years. He also recommends Dext to clients looking to simplify their bookkeeping and financial processes.
