Leaving the UK as a Landlord? How to Stay Compliant and Keep Your Rental Profits Safe

LANDLORD TAX • CROSS-BORDER PLANNING • 2025

Summary: UK landlords moving overseas must still pay tax on their UK rental income. Here’s what HMRC expects, how the Non-Resident Landlord Scheme works, and how to claim refunds when you leave the country.

• ✔ How to keep your buy-to-let compliant under HMRC rules after departure
• ✔ When the Statutory Residence Test (RDR3) makes you non-resident
• ✔ How to avoid double taxation on rental and capital gains

Who This Applies To

If you own UK residential or commercial property and are relocating abroad — whether to retire, work, or invest internationally — you remain liable for UK tax on your UK rents. Many landlords wrongly assume that leaving the country ends their tax obligations. It doesn’t.

HMRC Rules for Landlords Abroad

Under the Statutory Residence Test (RDR3), you become non-resident only if you meet one of the automatic overseas tests (for example, full-time work abroad with < 91 UK days). Even as a non-resident, your UK property income is taxed through the Non-Resident Landlord Scheme (NRLS). Tenants or letting agents must deduct 20% basic-rate tax unless you register with HMRC to receive rent gross and self-assess the actual liability.

Key Tax Rates (2025/26)

• 💸 Income Tax on rents – 20%, 40%, 45% bands apply
• 🏠 Corporation Tax (for Ltd Co landlords) – 25% main rate
• 📈 Capital Gains Tax – 18% / 24% (£3,000 annual exemption)
• 💰 Dividend Tax – 8.75%, 33.75%, 39.35% after £500 allowance

What To Do When You Leave

Complete Form P85 if you’re not in Self Assessment, or add the SA109 Residence pages to your return. Declare continuing rental income and company dividends. If you sell property after leaving, report the disposal within 60 days under the Non-Resident Capital Gains Tax (NRCGT) rules (TCGA 1992 s. 14D).

CGT When You Return Within Five Years

Under the temporary non-residence rule (TCGA 1992 s. 10A), if you sell a property while abroad and come back within five tax years, the gain can be re-taxed in your year of return. Plan sale timings carefully — and keep evidence of dates and contracts to support your non-resident status.

Useful Resources

• HMRC – Tax if you retire abroad or return to the UK
• LITRG – Leaving the UK Guidance
• Avoiding double tax agreements (DTAs)

Disclaimer: General guidance only — seek personalised advice before making tax decisions.