UK Property Checklist for Landlords Living in the UAE
Owning a UK rental property while living in the UAE is very common – and very manageable – but only if the UK compliance pieces are kept in order. The UK does not stop taxing rental income just because you’ve moved abroad, and most of the issues we see arise not from complex planning, but from things simply being missed or misunderstood.
This checklist sets out what you should have in place, and what to do if things have slipped.
1. Non-Resident Landlord (NRL) Scheme
If you live outside the UK and rent out UK property, you should be registered under the Non-Resident Landlord Scheme. This allows rental income to be paid to you gross, rather than having basic rate tax deducted by the letting agent or tenant.
If you are not registered, tax may already be being withheld at source without you realising – or worse, nothing has been withheld and HMRC will expect the tax via Self Assessment. Registration is not optional; it is part of the compliance framework for overseas landlords.
2. UK Self Assessment Returns
Most UAE-based landlords still need to file a UK Self Assessment tax return each year to report rental income and expenses.
This applies even if:
The rental profit is small
The property is jointly owned
The tax due is nil after expenses
You assumed “non-resident” meant “non-taxable”
Rental income is declared annually, usually by 31 January following the end of the tax year, with payments on account potentially applying.
3. Allowable Expenses and Record-Keeping
UK rental profits are calculated after deducting allowable expenses, such as:
Letting agent fees
Repairs and maintenance (not improvements)
Safety certificates and compliance costs
Replacement of domestic items
Mortgage interest (restricted to basic rate tax relief)
You should retain records for at least 6 years, including invoices, statements and mortgage interest certificates. Poor records are one of the fastest ways to overpay tax – or lose an HMRC enquiry.
4. Mortgage Interest Restriction Awareness
Mortgage interest is not fully deductible against rental income. Instead, relief is given as a 20% tax credit.
This catches many expats out, particularly higher or additional rate taxpayers, and often explains why the tax bill is higher than expected. Understanding this is key to avoiding surprises.
5. Capital Gains Tax (CGT) on Sale
If you sell a UK property while living in the UAE, you must:
File a UK CGT return within 60 days of completion
Pay any CGT due within the same timeframe
This applies even if:
You have no other UK tax filings
The property was once your main home
You assume CGT is “sorted later”
Late filing penalties apply quickly here, and HMRC do not accept ignorance as a defence.
6. UK Bank Accounts and Rent Flow
HMRC expect rental income to be traceable. Ideally:
Rent should be paid into a UK bank account
Letting agent statements should reconcile to deposits
Transfers to UAE accounts should be clearly identifiable
Messy cash flows are a common trigger for HMRC queries.
7. Joint Ownership and Income Splits
If you own property jointly (with a spouse or partner), HMRC default to a 50:50 income split, regardless of who paid for the property or mortgage.
If that split does not reflect reality, a Declaration of Trust and Form 17 may be required. This must be done properly and on time – HMRC do not allow backdating.
Bringing Your UK Property Records Up to Date
If you’ve realised that something has been missed – late filings, undeclared income, or confusion over the NRL scheme – the key point is this: doing nothing is the worst option.
HMRC are increasingly good at matching data from:
Letting agents
Land Registry
Banks
Overseas movement records
Bringing things up to date usually involves:
Registering correctly under the NRL scheme
Filing outstanding Self Assessment returns
Calculating historic tax correctly
Disclosing to HMRC proactively where required
Handled properly, this is often far less painful (and far less expensive) than people fear – especially when done before HMRC make first contact.
Final thought
Living in the UAE does not complicate UK property tax nearly as much as silence and assumptions do. With the right structure and records, UK rental property can remain a solid, low-stress investment – even from the other side of the world.
