NRL Scheme

UK letting agents (or tenants if no agent is used) are required to calculate and deduct tax from rental income concerning their non-resident clients. This can often lead to more tax being deducted than is necessary due to the agent not being able to take UK personal allowance (where applicable) and 'external' expenses, such as mortgage interest, into account.

This deduction (see 'Withholding Tax') can be bypassed by application to HMRC for approval to be exempted. This is known as the 'NRL Scheme' and, once approved, the individual is required to file UK tax returns whereby they report their income, however, can also take all allowable expenses into account, accordingly reducing profit and associated liability to tax for this income item. Where applicable, UK personal allowance can also be claimed on the tax return with the effect of reducing the tax liability over combined sources of UK income.