UK Expat Property Tax Return 2026 -- SA105, NRLS and New Property Income Rates

Last reviewed: 26 April 2026

The UK expat property tax return in 2026 combines three HMRC Self Assessment supplementary forms that non-resident UK landlords must file: the SA100 (main Self Assessment return), the SA105 (UK Property -- rental income, allowable expenses, and the mortgage interest credit calculation), and the SA109 (Residence, Remittance Basis etc. -- non-residency declaration and DTC relief claims). The most significant recent change to the UK expat property tax return is the introduction of separate property income tax rates from 6 April 2026 under the Autumn Budget 2025 OOTLAR (gov.uk/government/publications/autumn-budget-2025-overview-of-tax-legislation-and-rates-ootlar): 22% basic rate, 42% higher rate, and 47% additional rate. For the full UK property investment framework for expats, see our UK expat property guide. For the UK tax residency rules that determine when the SA109 is required, see our UK tax residency guide.

The UK expat property tax return must be filed annually where UK rental income above the personal allowance (£12,570 for 2025/26) is received. The online Self Assessment deadline for the 2025/26 return (tax year ending 5 April 2026) is 31 January 2027; the paper return deadline is 31 October 2026. HMRC late filing penalties (Finance Act 2009 Schedule 56): £100 immediate; £10 per day after 3 months (up to £900); £300 or 5% of tax due at 6 months; a further £300 or 5% of tax due at 12 months. The HMRC SA105 form and notes are at gov.uk/government/publications/self-assessment-uk-property-sa105; the HMRC Property Income Manual at gov.uk/hmrc-internal-manuals/property-income-manual covers the allowable expenses, Section 24 restriction, and NRLS mechanics. The HMRC NRLS guidance at gov.uk/tax-uk-income-live-abroad/rent covers the 20% withholding and NRL1 approval process.

SA105: completing the UK property income pages

The SA105 (UK Property) supplementary pages are the core form for the UK expat property tax return where UK residential or commercial property is let. Key SA105 boxes for non-resident landlords: Box 20 (UK property income from jointly-let property -- enter the landlord’s share of gross rents); Box 24 (rents and other income from property -- enter total gross rents); Box 25 (total allowable expenses -- letting agent fees, insurance, repairs, maintenance, management fees, professional fees); Box 26 (allowable expenses are deducted from gross rents to give net rental profit); Box 45 (finance costs -- enter the mortgage interest paid; this is NOT deducted from income but is used to calculate the 20% basic-rate tax credit); and Box 44 (tax credit for finance costs -- 20% of Box 45). The NRLS 20% withholding already remitted by the letting agent or tenant (if applicable) is credited against the Self Assessment liability via Box 48. HMRC publishes exchange rates for reporting foreign currency income at gov.uk/government/publications/hmrc-exchange-rates-for-2025-to-2026; rental income in foreign currency must be converted to GBP at HMRC’s published rate for the date of receipt or the average rate for the tax year. The SA105 form and notes at gov.uk/government/publications/self-assessment-uk-property-sa105 provide the box-by-box completion guidance.

Property income tax rates from 6 April 2026

The Autumn Budget 2025 OOTLAR (gov.uk/government/publications/autumn-budget-2025-overview-of-tax-legislation-and-rates-ootlar) introduced separate property income tax rates effective 6 April 2026. The new rates apply to UK residential and commercial rental income for individual landlords: 22% basic rate on property income up to the higher-rate threshold (£50,270 combined income for 2025/26); 42% higher rate on property income between £50,271 and £125,140; 47% additional rate on property income above £125,140. These rates replace the previous alignment with standard income tax bands (20%/40%/45%). Non-resident landlords are entitled to the personal allowance (£12,570 for 2025/26) against UK-source income including rental income. The Section 24 mortgage interest restriction (Finance Act 2015, fully in force from 2020) prohibits deducting mortgage interest as an expense; instead, a 20% basic-rate tax credit applies to the finance costs regardless of the new 22%/42%/47% property income rates. For a non-resident landlord with £25,000 net annual rental income (after allowable expenses, before mortgage interest credit) and no other UK income: tax at 22% on (£25,000 - £12,570 personal allowance) = 22% x £12,430 = approximately £2,735 per year from 2026/27 (excluding the mortgage interest tax credit).

NRLS: 20% withholding and NRL1 approval

The Non-Resident Landlord Scheme (NRLS, gov.uk/tax-uk-income-live-abroad/rent) requires letting agents or tenants to withhold 20% basic-rate tax from gross rent before paying a non-resident landlord and remit it quarterly to HMRC. The NRLS 20% withholding is a payment on account against the annual Self Assessment liability at the new property income rates (22%/42%/47% from 6 April 2026) -- the final tax due is calculated on the SA105, and excess withholding is refunded via Self Assessment. Non-resident landlords can apply for NRL1 approval (gov.uk/guidance/non-resident-landlord-scheme) to receive rent gross where UK tax affairs are current; HMRC grants NRL1 approval where the landlord is registered for Self Assessment, has no outstanding UK tax liabilities, and has filed all required returns. NRL1 approval is renewed annually. Apply to HMRC’s CS&I2 team via the NRL1 form at gov.uk/guidance/non-resident-landlord-scheme; typical approval time is 4-6 weeks. The NRLS withheld amount appears in Box 48 of the SA105 and is credited against the tax liability calculated on the rental profit. Tenants who self-manage their rental payments directly to a non-resident landlord are legally required to operate the NRLS withholding for rent above £100 per week (£433 per month).

Section 24 mortgage interest credit

Section 24 (Finance Act 2015, fully phased in from 2020) prohibits individual UK landlords -- resident or non-resident -- from deducting mortgage interest as an allowable expense from rental income. Instead, a 20% basic-rate tax credit is applied to the finance costs (Box 45 and Box 44 of SA105). For a higher-rate non-resident landlord with annual mortgage interest of £12,000 on a UK buy-to-let property: the 20% tax credit is £2,400; the net additional tax cost versus full deductibility at 42% (from 6 April 2026) is 42% x £12,000 minus £2,400 credit = £2,640 extra tax compared to the pre-Section 24 position. UK limited companies holding residential property are not subject to Section 24; they deduct mortgage interest before corporation tax (19-25%). The Annual Tax on Enveloped Dwellings (ATED, gov.uk/government/collections/annual-tax-on-enveloped-dwellings) applies to UK companies holding residential property above £500,000 at rates from £4,450 to £269,450 per year for 2025/26. HMRC’s Property Income Manual at gov.uk/hmrc-internal-manuals/property-income-manual covers Section 24 in detail. Specialist cross-border tax advice is required before structuring or restructuring a UK buy-to-let portfolio.

NRCGT: the 60-day return on property disposal

Non-Resident Capital Gains Tax (NRCGT) applies when a non-UK-resident sells UK residential property (or UK commercial property from April 2019). A 60-day NRCGT return must be filed with HMRC within 60 days of the completion date (gov.uk/capital-gains-tax-for-non-residents-uk-residential-property) and any NRCGT due must be paid in the same window. A £100 late filing penalty applies even if no CGT is due. NRCGT rates for 2025/26: 18% basic rate and 24% higher rate on residential property gains. The Annual CGT Exempt Amount is £3,000 for 2025/26. The NRCGT 60-day return is separate from the annual Self Assessment; even landlords with NRL1 approval who receive rent gross must file the NRCGT 60-day return on disposal in addition to their standard annual Self Assessment. Rebasing to April 2015 is available for UK residential property held before April 2015 -- only the gain since April 2015 is subject to NRCGT. Principal Private Residence (PPR) relief may apply for periods when the non-resident lived in the property; specialist advice is required to calculate the eligible PPR period. Finance Act 2025 residence-based IHT: UK property (always UK-sited) always falls within the UK IHT estate regardless of the owner’s residency status.

Filing deadlines and penalty regime

The UK Self Assessment filing deadlines for the 2025/26 tax year (ending 5 April 2026): paper return -- 31 October 2026; online return -- 31 January 2027; payment of any tax due -- 31 January 2027. Payments on account (interim payments) for 2025/26 are due 31 January 2026 (first payment on account) and 31 July 2026 (second payment on account); these are based on 50% of the 2024/25 Self Assessment liability. The HMRC Self Assessment penalty regime (Finance Act 2009 Schedule 56): £100 immediate penalty from 1 February 2027 for any return not filed by 31 January 2027, regardless of whether tax is owed; £10 per day after 3 months late (up to £900); the greater of £300 or 5% of tax due at 6 months; a further greater of £300 or 5% of tax due at 12 months. Interest at the HMRC late payment rate (approximately 7.5% per year, variable) accrues on unpaid tax from 31 January 2027. Non-UK-residents who receive UK rental income and are unaware of their filing obligation remain subject to all these penalties. HMRC’s SA105 form at gov.uk/government/publications/self-assessment-uk-property-sa105 and SA109 at gov.uk/government/publications/self-assessment-residence-remittance-basis-etc-sa109 are the required forms.

This article is for general information only and does not constitute tax, legal, financial or immigration advice. Rules and rates change; verify with the primary sources cited or consult a qualified adviser before acting.

FAQ

Which HMRC forms does a non-resident UK landlord need to file?

A non-resident UK landlord with UK rental income above the personal allowance (£12,570 for 2025/26) must file: SA100 (main Self Assessment return) + SA105 (UK Property -- rental income and allowable expenses) + SA109 (Residence, Remittance Basis etc. -- non-residency declaration and DTC claims). The SA109 declares non-UK-residency and any treaty relief on UK-source income. HMRC SA105 is at gov.uk/government/publications/self-assessment-uk-property-sa105; SA109 is at gov.uk/government/publications/self-assessment-residence-remittance-basis-etc-sa109.

What are the new property income tax rates from April 2026?

Separate property income rates apply from 6 April 2026 (Autumn Budget 2025 OOTLAR): 22% basic rate (up to £50,270 combined income); 42% higher rate (£50,271 to £125,140); 47% additional rate (above £125,140). These replace the previous standard income tax rates (20%/40%/45%). The personal allowance (£12,570 for 2025/26) applies against UK-source income including rental income. Section 24 restricts mortgage interest to a 20% basic-rate tax credit -- not a full deduction at the new rates.

How does the NRLS withholding work?

The NRLS (gov.uk/tax-uk-income-live-abroad/rent) requires letting agents or tenants to withhold 20% basic-rate tax from gross rent before paying a non-resident landlord and to remit this quarterly to HMRC. The 20% withheld is a payment on account against the annual Self Assessment liability at the new property income rates (22%/42%/47%). Non-resident landlords can apply for NRL1 approval to receive rent gross where UK tax affairs are current; typical approval time is 4-6 weeks from application.

What is the NRCGT 60-day rule?

Non-residents who sell UK residential property must file a NRCGT return with HMRC within 60 days of the completion date (gov.uk/capital-gains-tax-for-non-residents-uk-residential-property) and pay any NRCGT due in the same window. A £100 late filing penalty applies even if no CGT is due. NRCGT rates for 2025/26: 18% basic rate and 24% higher rate on residential property gains. The Annual CGT Exempt Amount is £3,000 for 2025/26. Rebasing to April 2015 is available for properties held before that date.

Can I deduct mortgage interest from rental income as a non-resident landlord?

No. Section 24 (Finance Act 2015, fully in force from 2020) prohibits individual landlords -- resident or non-resident -- from deducting mortgage interest as an expense. Instead, a 20% basic-rate tax credit applies to the finance costs (Box 44 and 45 of SA105). For a higher-rate non-resident landlord at the new 42% rate, the net extra tax cost versus full deductibility is 22% of annual mortgage interest (42% minus the 20% credit). UK limited companies holding residential property are not subject to Section 24.

What is the Self Assessment deadline for a non-resident UK landlord in 2025/26?

The online Self Assessment deadline for 2025/26 (tax year ending 5 April 2026) is 31 January 2027; the paper return deadline is 31 October 2026. Tax due for 2025/26 is also payable by 31 January 2027. HMRC late filing penalties: £100 immediately from 1 February 2027; £10 per day after 3 months (up to £900); the greater of £300 or 5% of tax due at 6 months; further penalties at 12 months. Interest accrues on unpaid tax from 31 January 2027.

Sources

1. HMRC -- SA105 UK Property form and completion notes (verified 26 April 2026)
2. GOV.UK -- Autumn Budget 2025 OOTLAR (property income rates 22%/42%/47% from 6 April 2026) (verified 26 April 2026)
3. HMRC -- Non-Resident Landlord Scheme (NRLS) guidance and NRL1 approval process (verified 26 April 2026)
4. HMRC -- Property Income Manual (Section 24, allowable expenses, NRLS mechanics) (verified 26 April 2026)
5. HMRC -- NRCGT for non-residents on UK residential property (60-day return rule) (verified 26 April 2026)