The NRLS is a scheme to tax the UK rental income of persons who have a usual place of abode outside the UK – known as non – resident landlords.

The NRLS imposes obligations on the tenant or the letting agent (if there is one).

In order to understand the NRLS, it is important to understand that if you live overseas but you receive income from letting out a property in the UK, this income is generally taxable in the UK like any other UK-sourced income. This is the case regardless of whether or not you are resident or non-resident in the UK for tax purposes and regardless of where the income is physically paid.

However, as it can be difficult for HMRC to pursue individuals who live outside the UK and do not comply with their UK tax obligations, UK law seeks to collect tax on the rental income before it is paid to the overseas landlord under the NRLS. It does this by imposing on the UK letting agent an obligation to withhold tax on the rental income before it is paid to the overseas landlord. Where there is no UK letting agent, the tenant themselves must withhold tax personally if the rent they pay to the overseas landlord is more than £100 a week.

Any tax withheld by the letting agent or tenant is then available as a deduction against the overseas landlord’s UK tax liability when they complete a UK Self-Assessment tax return. The NRLS does not change whether or not the UK property income is taxable. Non-resident landlords will usually be required to file a Self-Assessment tax return, even if there is no tax to pay.

CGT is a tax charged if you sell, give away, exchange or otherwise dispose of an asset and make a profit or ‘gain’.

It is not the amount of money you receive for the asset but the gain you make that is taxed.

Broadly, to calculate the gain, you compare the sale proceeds (or value of the asset at the time it was disposed of) with the original cost of the asset (or value when it was acquired). 

If you are a UK resident, you may be liable to CGT on disposals of assets located anywhere in the world, not just your UK-located assets.

Non-residents are liable to CGT if they are carrying on a trade in the UK. If you are non-resident, you may also be liable to CGT on the disposal of UK land and property.

There are special rules for CGT purposes that apply to individuals who are normally resident in the UK but are temporarily resident outside the UK (broadly this means those who are non-resident in the UK for less than five years).

You may have to pay CGT when you give an asset as a gift to someone. The rules are different depending on who you give the gift to and there are special reliefs for gifts of business assets. 

No, you do not pay CGT when you make a gift to your husband, wife or civil partner – as long as both of the following apply:

• you lived together for at least part of the tax year in which you made the gift; and
• the gift is not of ‘trading stock’ (trading goods bought for resale).

However, if your husband, wife or civil partner later sells or otherwise disposes of the asset, they will have to pay the tax on any gain made over the total period of ownership, since the date it was first acquired by you (or 31 March 1982, if later). In other words, the recipient spouse or civil partner is treated as having owned the asset from the date the transferring spouse acquired it.