UK · Updated July 2026

Making Tax Digital for Non-Resident Landlords

Living abroad does not take you out of MTD. UK rental income is UK source income, so a non-resident landlord over the threshold must keep digital records and file quarterly. The Non-resident Landlord Scheme continues alongside it, and there are two exemptions that catch many overseas landlords.

The short answer Two exemptions MTD and the NRLS Practical issues FAQ

Yes, MTD for Income Tax can apply to a non-resident landlord. The test is the source of the income, not where you live. UK property income is UK source, so if your qualifying income exceeds the threshold for the year you are within MTD and must keep digital records and submit quarterly updates, exactly as a UK resident landlord would.

Two exemptions catch a large share of overseas landlords. If you do not have a UK National Insurance number before the start of the tax year you are automatically exempt and cannot sign up at all. Separately, if your 2024 to 2025 return included the SA109 residence and remittance basis pages, you are automatically exempt until April 2027.

MTD does not replace the Non-resident Landlord Scheme. The two run side by side. The NRLS governs whether tax is withheld from your rent by your agent or tenant. MTD governs how you record and report the income. Tax withheld under the NRLS is credited at the final declaration, not in the quarterly updates.

EXEMPTIONS

The Exemptions That Matter to Overseas Landlords

These are automatic. You do not apply for them.

No National Insurance number

If you do not have a UK National Insurance number before the start of the tax year, you are automatically exempt and cannot sign up for MTD for that year. This is permanent while it remains true, and it exempts a large number of overseas owners who have never worked in the UK.

SA109 filed for 2024 to 2025

If your 2024 to 2025 Self Assessment return included the SA109 residence, remittance basis and domicile pages, you have a temporary automatic exemption until April 2027. Most non-resident landlords who file a UK return complete SA109, so this defers MTD by a year for many.

Non-resident companies

MTD for Income Tax applies to individuals. A non-resident company holding UK property is within corporation tax, not income tax, and is outside this regime. Trusts and personal representatives are also outside it.

Do not treat the SA109 exemption as permanent. It runs to April 2027 only. If you expect to keep filing SA109 pages after that and think an exemption should continue, HMRC requires an application rather than treating it as automatic. Check your position well before April 2027 rather than assuming the deferral rolls forward.

TWO REGIMES

How MTD Sits Alongside the Non-resident Landlord Scheme

They do different jobs. Complying with one does not discharge the other.

Non-resident Landlord SchemeMaking Tax Digital for Income Tax
PurposeCollects tax at source on UK rent paid to a landlord whose usual place of abode is outside the UK.Governs how income and expenses are recorded and reported to HMRC.
Who actsYour letting agent, or the tenant directly where there is no agent and rent exceeds the threshold.You, the landlord, through MTD compatible software under your own National Insurance number.
EffectBasic rate tax is withheld from rent, unless HMRC has approved you to receive rent gross.Four quarterly updates plus a final declaration replacing the Self Assessment return.
Reporting the tax withheldCertificate NRL6 from your agent each year showing tax deducted.Quarterly updates show gross income. The NRLS credit is applied at the final declaration only.

The practical trap. Because quarterly updates report gross income with no credit for tax already withheld, the running position through the year will look like you owe far more than you do. The NRLS deductions only appear at the final declaration. Landlords who read quarterly figures as a live tax bill routinely overestimate their liability. If you have approval to receive rent gross under NRL1, this does not arise.

PRACTICAL

What Overseas Landlords Should Do Now

Confirm whether you have a National Insurance number. This single fact decides whether MTD can apply to you at all. If you have one, you are potentially in scope. If you do not, you are exempt for that year and cannot sign up even voluntarily.

Check whether your 2024 to 2025 return included SA109. If it did, you have until April 2027, which is useful breathing room but not an exit.

Work out your qualifying income on the right basis. Qualifying income is gross UK rent before expenses, plus any other UK qualifying income, tested against the return from two years earlier. Only UK source income counts. Property you own outside the UK, while you were non-resident in the determining year, does not bring you into MTD.

Check your agent can give you data at the right frequency. Many overseas landlords receive an annual statement only. MTD needs categorised figures four times a year, on a fixed timetable, in a digital format that flows into compatible software. An annual PDF will not support quarterly filing.

Do not rely on the time difference or postal delays. Deadlines are 7 August, 7 November, 7 February and 7 May regardless of where you live.

FAQ

Non-resident Landlord MTD Questions

Yes, potentially. MTD for Income Tax follows the source of the income rather than the residence of the owner, so UK rental income counts and a non-resident landlord whose qualifying income exceeds the threshold is within the regime. Two automatic exemptions commonly apply to overseas landlords: having no UK National Insurance number before the start of the tax year, and having included the SA109 pages on the 2024 to 2025 return, which defers MTD until April 2027.
Yes. If you do not have a UK National Insurance number before the start of the tax year you are automatically exempt from MTD for Income Tax for that year, and you cannot sign up even if you want to. The exemption is assessed each year, so obtaining a National Insurance number later can bring you into scope for a subsequent year. You still have your normal Self Assessment obligations.
No. They are separate regimes that operate at the same time. The NRLS decides whether your agent or tenant withholds basic rate tax from your rent before paying it over, or whether HMRC has approved you to receive it gross. MTD decides how you keep records and report to HMRC. You can be inside both at once, and complying with one does not discharge the other.
It is not. Quarterly updates report gross income and, where applicable, expenses. The credit for tax already deducted under the NRLS is applied at the final declaration at the end of the year, using the NRL6 certificate your agent issues. This means the position shown during the year will look worse than your actual liability, because the tax you have already paid is not yet reflected.
Not where you were non-UK resident in the year that determines your MTD start date. Non-UK property and non-UK self employment income arising to someone who was non-resident in that determining year is outside MTD. UK source income remains in scope, so a non-resident with UK rental property is tested on the UK rents. If you later become UK resident, your worldwide position changes and should be reviewed.
SA109 is the Self Assessment supplementary page for residence, remittance basis and domicile, completed by most non-resident landlords who file a UK return. If it was included on your 2024 to 2025 return you have an automatic temporary exemption from MTD until April 2027. It is a deferral, not a permanent exit. If you expect to need an exemption beyond that point, HMRC requires an application rather than treating it as automatic, so review your position in good time.

Sources and further reading

General information, not tax advice. Verified against GOV.UK and professional body guidance in July 2026. Non-residence and MTD interact with treaty position and domicile, so take advice on your own facts.

Related guides and tools

Quarterly figures without chasing your agent

Rentalize gives overseas landlords a live view of UK rent, expenses and arrears in the categories MTD needs, whatever time zone you are in.