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The ‘Non-Resident Landlords Scheme’ (NRLS) requires that where there is no UK-based representative/agent, the rent being paid directly to a landlord who lives outside of the UK, the tenant must deduct basic rate tax from the rent paid and pay the tax to HMRC on a quarterly basis.

• The calculation is of tax on the gross amount actually payable to the landlord (plus any payments made by the tenant where the payment is not a deductible expense).

• Tenants do not have to operate the scheme if the rent paid is less than £5,200 per annum.
  Where the tenant occupies the property for only part of the year the threshold of £5,200 is proportionately reduced.
• Where two or more people share a property as tenants the £5,200 limit applies separately to each in respect of each share of the rent.
• The tenant must make the tax payment plus submit an information return to HMRC confirming tax paid on a quarterly basis within 30 days of the end of each quarter (30 June, 30 September, 31 December and 31 March).
• By 5 July after the tax year-end, the tenant must submit an annual return to HMRC and a certificate to the landlord confirming payments made.

Further details of the scheme can be found at: www.hmrc.gov.uk/cnr/nrl_guide_notes.pdf.