Property investors are considered Non-Resident Landlords if they spend more than six months in any tax year outside the UK.
The Statutory Residence Test or other tax definitions of residence don’t apply to Non-Resident Landlords.
Instead, HM Revenue & Customs (HMRC) looks at their ‘usual place of abode’. This is where a landlord may stay for more than six months, but doesn’t have to be a main or permanent home.
Under the scheme, a landlord can have UK tax residence, but their ‘usual place of abode’ in another country.
Other Non-Resident Landlords include:
- Companies renting out property in the UK with a registered office or main place of business outside the UK
- Members of the armed forces or Crown servants, such as diplomats, posted overseas
If a property is rented out by joint owners and one is a Non-Resident Landlord, the profits are split according to the share of ownership of each. But only the share of the Non-Resident Landlord comes under the scheme.
Having a PO Box or ‘care of’ address in the UK is not enough for a landlord to claim a usual place of abode in the UK.