What is NRL3i?
This is the form that trustees (who are non resident landlords) need to complete to receive their UK rental income without UK income tax deductions.
Companies and individuals need to use a different form.
NRL eligibility criteria
Trustees must not have had any ‘tax obligations’ (outstanding tax bills) before the date of application and their current UK tax affairs must be in good order.
Does this mean that this rental income is tax free?
No, all UK rental income is subject to UK tax, regardless of where the landlord lives. A non resident trustee landlord can apply to have their payments made without first having UK tax deducted.
But they then need to include this income on their self assessment tax return so that the appropriate tax amount can be calculated.
Rules of a successful NRL3i application
You do not need to submit another NRL3i if the trust is already part of the scheme. There is no requirement for annual approval, so you only join once – great news paperwork wise! You also do not have to wait until the property is let out before you apply.
What if the trust gets new tenants?
HMRC will have to inform any new tenants, tenant finders or agents in writing that they should not tax the rent as usual. The approval is not automatically transferable.
How do I submit the NRL3i?
You can use your online tax account and complete the whole application process that way. Or, you can fill in your NRL3i on screen, print it and send it by post to HMRC.
You have to use the postal system if you are using a tax agent to act on your behalf. This is because you must include a signed ‘64-8 Agent Authorisation Form’ with your application. Confidentiality and security are top HMRC priorities.
Important!
Before your start filling in your on screen form, it is important to know that you cannot save some of it and return to finish later on. Prepare all your information, set aside a reasonable amount of time and get ready to do it all at once.
You must also check that your browser is updated, as older versions are not in sync with the new NRL3i format. Older NRL3i forms will not be accepted – make sure you are using the right one!
