How non-resident landlords report UK rental income: NRLS, Self Assessment, allowable expenses, Section 24, CGT and the UK–Turkey double tax treaty. Updated for 2026.
UK Tax Guide 2026 for Investors Who Own London Property from Turkey
Your London property is let. You live in Turkey. Do you owe tax in England?
Yes. Rental income arising in England is subject to UK tax even if you are not resident there.
The good news: you can deduct allowable expenses, and the system is structured and predictable.
What Is NRLS? (Non-Resident Landlord Scheme)
NRLS is the special withholding regime for landlords who are not tax resident in the UK.
How It Works
Default: Your letting agent or tenant deducts basic-rate income tax at 20% from each rent payment and pays it to HMRC. You receive net rent.
Exception — NRL Approval: If you apply to HMRC and receive NRL Approval, rent is paid to you without withholding. You then settle tax annually through Self Assessment.
How to apply: Submit HMRC form NRL1. Approval is usually granted where your tax compliance record is in order.
Which Income Is Taxable?
- Long-term rental income (AST)
- Short-term lets (including Airbnb — the £7,500 Rent-a-Room relief applies to your own home, not a buy-to-let investment property)
- Deposits retained rather than refunded
Which Expenses Can You Deduct?
| Expense | Deductible? | |---|---| | Letting agent fees | ✅ Yes | | Mortgage interest | ✅ Yes (full deduction in a company; restricted for individuals — Section 24) | | Repairs and maintenance | ✅ Yes (to maintain existing condition) | | Service charge | ✅ Yes | | Building insurance | ✅ Yes | | Solicitor / accountant fees (rent-related) | ✅ Yes | | Council Tax (void periods) | ✅ Yes | | Travel to inspect the property | ⚠️ Limited circumstances | | Improvements / renovation | ❌ No (capital expenditure — relevant to CGT) |
What Is Section 24? (Mortgage Interest Restriction)
Section 24 limits how much mortgage interest individual landlords can deduct from rental income. Instead of a full deduction, you receive a tax credit equal to 20% of the basic rate on the restricted amount.
Impact: For higher-rate taxpayers (40–45%), the restriction can materially increase the tax bill.
Solution: Hold the property through an SPV (Special Purpose Vehicle). Section 24 does not apply to companies — interest is fully deductible as an expense.
Self Assessment Calendar (2025/2026 Tax Year)
| Date | Obligation | |---|---| | 5 April 2026 | End of 2025/26 tax year | | 31 October 2026 | Paper return deadline | | 31 January 2027 | Online return and payment deadline | | 31 July 2027 | Second payment on account |
Important: If this is your first return, you must register with HMRC by 5 October 2026.
UK–Turkey Double Taxation Agreement
The UK and Turkey have a Double Taxation Agreement. Under it:
- UK tax paid on rental income can be credited against tax due in Turkey on the same income
- It prevents the same income being taxed in full in both countries
Your Turkish tax adviser must apply the credit correctly.
CGT (Capital Gains Tax) — On Sale
When you sell, tax is due on the gain:
| Status | Rate (2026) | |---|---| | Basic-rate taxpayer | 18% | | Higher-rate taxpayer | 24% | | Company | 25% (Corporation Tax) |
60-day rule: You must report the disposal and pay CGT within 60 days of completion. Late payment attracts penalties and interest.
Practical Steps
- Register with HMRC: Obtain a UTR (Unique Taxpayer Reference) — online registration
- Apply for NRL Approval: To receive rent without withholding
- Set up online access: Register for HMRC's Government Gateway
- Appoint an accountant: A UK property specialist typically charges £500–£2,000 per year to manage returns
- Keep records: Every repair receipt, agent invoice, and insurance policy should be filed
Tax structuring and accountant introductions:
+44 7990 38 1102 | investinlondon.com.tr