I. My letting agent withholds UK tax on my rent: how the Non-Resident Landlord Scheme works and how to receive your rent gross with form NRL1

A. Why your agent or tenant deducts tax before you see a penny: the scheme year, the quarterly deadlines and the 100-pound tenant rule

You moved to France, you kept your house in Manchester, Leeds or Bristol, and a letting agent manages it for you. Then the monthly statement arrives and a slice of the rent has been held back for HMRC, the British tax authority. Nothing has gone wrong. Because your usual home is now outside the United Kingdom, you have become what British tax law calls a non-resident landlord, and the Non-resident Landlords Scheme applies to you. The scheme taxes the UK rental income of people whose usual place of abode is outside the UK, in the words of the official guidance updated on 18 March 2026. Your letting agent is legally required to deduct tax from your UK rental income and pay it to HMRC. Anyone who manages property on behalf of a non-resident landlord counts as a letting agent for this purpose, so there is no escape by calling the person who collects your rent a property manager, a friend or a family member. If they manage the property for you, they operate the scheme.

The mechanics matter because they decide when money leaves your account. For the purposes of the scheme, the year runs from 1 April to the following 31 March, which is the British tax year, not the calendar year used in France. Letting agents and tenants who have to use the scheme must account for the tax every quarter, for the three-month periods ending on 30 June, 30 September, 31 December and 31 March. In practice this means your agent sends HMRC a quarterly return and payment, and you receive the rent net of the deduction. Many British owners living in France discover the scheme this way, months after the move, when they compare the rent the tenant pays with the smaller sum that lands in their French bank account. The deduction is not a final settlement of your British tax bill. It is an advance collection, a payment on account, and the final position is sorted out later through the British Self Assessment system, the annual personal tax return used in the United Kingdom. If too much was deducted, the excess comes back through that return. If too little was deducted, you pay the balance.

There is one narrow exception, and it concerns tenants rather than agents. If you have no letting agent and your tenant pays you directly, the tenant must normally operate the scheme themselves. But a tenant who pays rent of 100 pounds a week or less does not have to use the scheme unless HMRC tells them to do so. This threshold is measured per tenancy, and it helps owners of modest buy-to-let flats whose tenants pay directly. Note the contrast: a letting agent must use the scheme regardless of the amount of rent collected, even if it is 100 pounds a week or less. So changing from agency management to direct collection from the tenant does not automatically switch the deduction off, and in most cases the agent route keeps the deduction firmly in place until you obtain an approval to receive the rent gross, which is the subject of the next section.

Why does any of this survive Brexit? Because the Non-resident Landlords Scheme is purely domestic British law. It has nothing to do with European Union membership, and leaving the EU changed none of it. What Brexit changed is your residence position: before 2021 you could live in France while remaining under EU free movement, and many owners drifted into French tax residence without facing immigration controls. Since Brexit, a British citizen needs a visa or a Withdrawal Agreement residence permit to live in France, which makes the French tax residence of British landlords cleaner, more documented and harder to dispute. The French tax authority knows you live in France, and HMRC treats you as a landlord living abroad. Both systems tax the same rent at the same time, each under its own rules. That overlap is exactly what the France-UK double tax treaty exists to resolve, and the second part of this article explains how, but the starting point is to stop the bleeding at source in the United Kingdom by applying for approval to receive your rent with no tax deducted.

A practical warning before you apply. Approval is not automatic, and while you wait, the deductions continue. Keep every quarterly statement your agent sends you, because those statements are the proof of the British tax you have already suffered, and you will need that proof twice: once for your British Self Assessment return, and once for your French tax return, where the treaty credit is computed. If your agent has been deducting for years without telling you clearly, ask for a full history now. Reconstructing five years of deductions from bank statements alone is painful, and the French administration will not take your word for the amounts when you claim the credit described in Part II.

B. Form NRL1 approval: the three conditions, the three-month timing rule, the quarter-start date and the withdrawal risk

The way out of systematic deduction is an application to HMRC for approval to receive your rental income with no tax deducted. For an individual landlord, the form is called NRL1. There are sibling forms for companies and trusts, but a British owner living in France who holds the property in their own name uses NRL1. The official guidance states that most non-resident landlords who wish to receive their rental income with no tax deducted should apply for approval to HMRC, and it lists the three situations in which HMRC will give approval and register the landlord for Self Assessment: their UK tax affairs are up to date, they have never had any UK tax obligations, or they do not expect to be liable to UK tax for the tax year in which the application is made. Read those three conditions carefully, because they shape the whole strategy. The first covers the ordinary compliant landlord who files every year. The second covers someone who has genuinely never owed British tax. The third covers the landlord whose rental profit, after deductible expenses, sits below the taxable threshold for the year, which is common for a single modest flat with mortgage interest, agency fees, insurance and repairs properly deducted.

Deductible expenses deserve a paragraph of their own, because they decide whether the third condition is met and because they are the most frequent source of disappointment. The guidance has a dedicated section on deductible expenses, and the principle is that tax is ultimately due on the profit, not on the gross rent. Agency commission, buildings insurance, repairs as opposed to improvements, ground rent and service charges on a leasehold flat, accountancy fees and the interest element of a buy-to-let mortgage all reduce the taxable profit under British rules. What approval does not do is exempt the income. It only changes the timing: instead of the agent holding back tax every quarter, you receive the gross rent and you settle the correct amount later through Self Assessment. Landlords who treat approval as an exemption, spend the gross rent and forget the January Self Assessment deadline manufacture their own crisis, with British late-filing penalties followed by the withdrawal of the approval itself.

Timing rules are strict and catch many applicants. If you are leaving the United Kingdom to live abroad, you should apply no more than three months before you leave, and HMRC cannot consider an application before then. If your usual home is already outside the United Kingdom, which is the position of a British reader already settled in France, you can apply immediately. Once HMRC grants approval, it sends a notice to every tenant or letting agent named on the application, authorising them to pay the rental income without deducting tax. All notices give the date from which rental income should be paid without deducting tax, and that date will usually be the first day of the quarter in which the application was received. So an application received in May takes effect from 1 April, while an application received in July takes effect from 1 July. There is no backdating beyond the start of the current quarter, which means tax deducted in earlier quarters stays deducted until the Self Assessment return reconciles it. Apply as soon as the French move is certain rather than waiting for the first painful statement.

Approval can be taken away. HMRC may withdraw approval where it is no longer satisfied that the information in the application is correct, where it is no longer satisfied that the landlord will follow their UK tax obligations, or where the landlord fails to comply in practice, for example by ignoring Self Assessment. Withdrawal revives the deduction obligation immediately, and the agent must start holding back tax again. For a British owner in France, the most common trigger is simple neglect: the gross rent arrives in euros, life in France takes over, the British return slips down the priority list, and HMRC concludes that obligations are not being met. The remedy is discipline. Keep a British correspondence address or a reliable forwarding arrangement, file the Self Assessment return every year even in a loss-making year, and tell HMRC when the letting ends or the property is sold. Approval is a facility for compliant landlords, not a status you acquire once and keep forever.

One final British point before crossing the Channel. Approval to receive rent gross does not decide where the rent is taxed. It decides only how the British slice is collected. Whether France can also tax the same rent, and how the double charge is removed, depends entirely on French domestic law and on the double tax treaty signed in London on 19 June 2008. That is where many expatriate landlords lose money without realising it: they sort out the British side, see the gross rent arrive, and assume the story is over, while in France the rent sits undeclared, generating penalties and interest that no treaty credit can erase, because the credit only works on income that is properly declared. Part II explains the French side step by step.

II. Declaring your UK rents in France: worldwide taxation, the treaty credit and how to challenge double tax

A. Your UK rents are French taxable income: rental profits, the progressive scale, social charges and the rule that forbids deducting a British loss

Once you are a French tax resident, France taxes your worldwide income. That single sentence is the foundation of everything that follows. Your English rental profit does not become invisible because the house stands in Sheffield and the tenant pays in pounds. French domestic law brings it into the French tax base, the treaty then allocates the right to tax between the two States, and a credit mechanism removes the double charge. But the mechanism only works if you declare. Each year, tax is due on the profits and income which the taxpayer makes or has available during that same year, in the wording of Article 12 of the French Tax Code, the Code général des impôts. The provision reads: “L’impôt est dû chaque année à raison des bénéfices ou revenus que le contribuable réalise ou dont il dispose au cours de la même année.” UK rents received during the year therefore belong in the French return for that year, converted into euros at the appropriate rate, even if HMRC has already taken a slice at source and even if the British tax year straddles two French calendar years.

The category matters because it decides which expenses you may deduct in France. Rents from letting unfurnished property fall into rental income, known in French as revenus fonciers. Article 14 of the Tax Code provides that this category covers, in substance, income from built property such as houses, together with specified fixtures and installations, and income from unbuilt property of every kind. The French text states: “sont compris dans la catégorie des revenus fonciers, lorsqu’ils ne sont pas inclus dans les bénéfices d’une entreprise industrielle, commerciale ou artisanale, d’une exploitation agricole ou d’une profession non commerciale : 1° Les revenus des propriétés bâties, telles que maisons et usines, ainsi que les revenus […]” together with fixtures attached to the premises and commercial or industrial installations comparable to buildings. A British buy-to-let held privately by a French resident therefore produces revenus fonciers in France, computed under French rules: gross rents minus deductible charges such as management fees, insurance, repairs, local British taxes comparable to deductible charges, and interest on the loan used to acquire or preserve the property. Keep the British expense invoices, because the French inspector will ask for them, and a charge that is deductible in the United Kingdom is not automatically deductible in France.

Married couples and civil partners should note that French taxation is assessed at household level. Article 6 of the Tax Code provides that married couples are subject to joint taxation for the income received by each spouse and by their dependent children, with the assessment issued in both names, and that partners in a civil solidarity pact, the French PACS, are jointly taxed in the same way. So where the English buy-to-let belongs to both spouses, the rents enter the joint French base, and where it belongs to one spouse alone, the rents still enter the joint return because the household is taxed together. This surprises British couples used to fully individual taxation in the United Kingdom, and it changes the effective rate, which brings us to the scale.

France taxes household income at progressive rates, and your UK rents climb the same ladder as your French salary or pension. Article 197 of the Tax Code sets the scale applied to each slice of household income above 11,600 euros: 11 per cent on the slice above 11,600 euros up to 29,579 euros, 30 per cent above 29,579 euros up to 84,577 euros, 41 per cent above 84,577 euros up to 181,917 euros, and 45 per cent above 181,917 euros, with the family quotient reduction capped per half-share. These are the figures of the scale in force as published by Légifrance, the official French legal database. The practical consequence is that a British retiree in the Dordogne with a French pension plus 15,000 euros of net English rents pays French tax on those rents at their marginal household rate, not at a flat rate, and the treaty credit described below mirrors that same French tax rather than the British tax actually suffered. High-earning households feel this hardest: rents stacked on top of a Paris salary can face the upper slices of the scale, and the NRLS deduction suffered in Britain, which is only an advance payment, never caps the French charge.

Income tax is only half of the French bill. Individuals domiciled in France for tax purposes are also liable to social charges on investment and property income. Article L. 136-6 of the Social Security Code provides that individuals with French tax domicile are subject to a contribution on investment income assessed on the net amount used for income tax, expressly including rental income: “Les personnes physiques fiscalement domiciliées en France au sens de l’article 4 B du code général des impôts sont assujetties à une contribution sur les revenus du patrimoine assise sur le montant net retenu pour l’établissement de l’impôt sur le revenu […] : a) Des revenus fonciers […]” Your net English rents therefore attract French social charges in addition to income tax, and this is where the treaty delivers one of its most valuable protections, because the highest French court has confirmed that the treaty credit extends to those social charges too, as Section B explains. Landlords who declare the rents for income tax but omit them from the social charges base receive a separate reassessment, with its own penalties, and the treaty credit must then be claimed separately on each charge.

How do you declare in practice? UK rents are foreign-source income, so they go through the foreign-income schedule of the French return, form 2047, known administratively as cerfa 11226, the schedule for income received abroad, filed alongside the main return. Report the gross rents, deduct the French-law charges to reach the net, and claim the treaty credit so that the British tax already suffered eliminates the French tax euro for euro up to the French amount. Attach nothing spontaneously, but keep everything: the letting agreement, the agent’s quarterly statements, the HMRC Self Assessment calculation, proof of the exchange rate used, and the loan interest certificates. If the property stands empty between tenancies or the expenses exceed the rents, a painful French rule awaits: a foreign rental loss cannot be set against your other French income. The Conseil d’État, the supreme court for tax disputes, held on 19 December 2019 in decision number 428443 that where a treaty reserves foreign rental profits to the foreign State and grants a credit only for positive income, only positive income enters the French base, to the exclusion of deficits. The court quashed the appeal ruling that had allowed a German rental deficit of 26,232 euros to be set against French global income, holding that the treaty’s words “bénéfices et autres revenus positifs”, meaning profits and other positive income, deliberately exclude losses. The same architecture governs British rents under the France-UK treaty: declare a British rental loss to preserve the paper trail, but do not deduct it from your French salary. Taxpayers who do so receive a reassessment, and the administration’s position on this point is settled law.

B. The France-UK treaty credit and how to challenge a French bill that ignores it

The treaty signed in London on 19 June 2008 and published in France by the decree of 7 January 2010 starts with a simple allocation. Article 6, on income from immovable property, provides: Income from immovable property, including farms and woodland, situated in one of the two States is taxable in that State, in the treaty’s words “sont imposables dans cet Etat”. Your Sheffield rents are therefore taxable in the United Kingdom, which is why HMRC collects through the Non-resident Landlords Scheme and Self Assessment. The same article extends the rule to income from direct use, letting and every other form of use of the property, and to property held through a business, so there is no argument that an English rent managed from France escapes British tax. But taxable in the United Kingdom does not mean taxable only in the United Kingdom. France, as your State of residence, keeps the right to include the rents in your French base, and the treaty then eliminates the resulting double charge through a credit. This two-step structure, British taxation at source plus French inclusion with credit, is the normal treaty pattern for rental income, and it is confirmed for the France-UK treaty by the official tax commentary, the BOFiP, in its section on the France-UK treaty rules for certain income.

The credit mechanism sits in Article 24, on elimination of double taxation, and its French paragraph deserves to be read closely because it answers nearly every dispute landlords raise. It provides that, notwithstanding any other provision of the treaty, income which is taxable or taxable only in the United Kingdom under the treaty is taken into account for the computation of French tax where it is not exempt under French domestic law. In that case, the United Kingdom tax is not deductible from that income, but the French resident is entitled, subject to the conditions and limits of subparagraphs (i) and (ii), to a tax credit against French tax. For income of the rental type, the credit equals the amount of the French tax corresponding to that income, on condition that the French resident is subject to United Kingdom tax on that income. The treaty then defines the French tax corresponding to the income with arithmetic precision: where the French tax on the income is computed at a proportional rate, the product of the net income by the rate actually applied; where it is computed under the progressive scale, the product of the net income by the rate resulting from the ratio between the tax actually due on the total net taxable income under French law and that total income. In plain terms, France computes your total French tax with the rents included, works out the average rate, applies that average rate to the net rents, and wipes out exactly that amount. If the British tax suffered exceeds the French tax on the rents, the excess is neither refunded nor carried forward by France. If the British tax is lower, you pay France the difference. The credit equals the French tax, never the British tax, and the British tax is never deducted as an expense.

Three questions dominate disputes, and the Conseil d’État answered all three in a leading opinion of 12 February 2020, number 435907, given on the France-UK treaty itself. First, does the credit extend to French social charges, given that Britain has no equivalent charge? Yes. The court held that the treaty’s opening words, “nonobstant toute autre disposition de la présente Convention”, meaning notwithstanding any other provision of this treaty, allow France to take treaty income into account for French tax, but do not allow France to withhold the credit from French social charges merely because no equivalent income tax exists in the United Kingdom. Second, is the credit confined to progressively taxed income? No. Nothing in the treaty restricts the credit to income under the progressive scale, and the treaty expressly provides computation methods for both proportional and progressive French taxes. Third, and most usefully for landlords with NRL1 approval or low British liability, must the landlord prove they actually paid British tax? No. The court held that the condition of being subject to United Kingdom tax means the income must be included in the base of one of the British taxes listed in the treaty, without being exempted by reason of status or activity, but it does not require actual payment. The condition is satisfied where the French resident shows they declared the income in the United Kingdom because it fell within the base of a listed British tax, even if they paid no tax on it there. A landlord with NRL1 approval who receives gross rents and owes nothing in Britain after expenses still gets the full French credit, provided the rents were within the British tax base and declared. Keep the British return as proof of declaration, not just proof of payment.

When the administration gets it wrong, and it regularly does with foreign rents, the remedy is the formal tax claim, known as the réclamation contentieuse. Article L. 190 of the Tax Procedures Book provides that claims concerning taxes and penalties collected by the administration fall within contentious jurisdiction where they seek either to repair errors in the basis or computation of assessments or to obtain the benefit of a right resulting from legislation or regulations. A refused or forgotten treaty credit is precisely that: the benefit of a right resulting from the treaty, which has legislative rank in France. File the claim with the tax office that issued the assessment, set out the treaty articles and the computation, and attach the British proof. If the administration rejects the claim expressly or stays silent for six months, the rejection can be taken to the administrative court, the tribunal administratif, but watch the clock: Article R. 421-1 of the Administrative Justice Code provides that proceedings must be brought within two months of notification of the decision challenged. Miss that deadline and even a perfect treaty argument dies. Where the reassessment also misclassifies the income, for example by treating gross rents as net or by denying deductible charges, the same claim should attack the base as well as the missing credit, because the credit is computed on the net income and every euro wrongly added to the base inflates both the French tax and, indirectly, the apparent shortfall.

Two traps deserve a final warning. The first is the exchange-rate shortcut. Landlords who convert a full year of sterling rents at the 31 December rate instead of the proper rate invite a base reassessment, and the treaty credit will then be recomputed on the corrected base, usually to their disadvantage. Use a consistent, documented rate, ideally the average annual rate published by the Banque de France or the rate applied by your French bank on transfer, and keep the calculation. The second trap is the undeclared years. Some owners declare correctly going forward but leave earlier years buried, hoping the administration will not look back. The treaty credit cannot be claimed on income that was never declared, penalties for undeclared foreign income are heavier than for domestic omissions, and a voluntary correction of past years almost always costs less than a reassessment with penalties after a data exchange between HMRC and the French administration. If you have several undeclared years, regularise them in one comprehensive filing with the credit claimed year by year, rather than waiting for the reassessment letter that starts the two-month clock running against you.

Conclusion

Living in France while letting property in England means living inside two tax systems at once, and the landlords who prosper are the ones who work both sides deliberately. On the British side, accept that the Non-resident Landlords Scheme applies from the day your usual home leaves the United Kingdom, expect your agent to deduct tax every quarter, and apply promptly on form NRL1 to receive the rent gross once your British tax affairs are in order, remembering that approval changes collection, not liability, and that it survives only through annual Self Assessment discipline. On the French side, declare the worldwide rents every year through the foreign-income schedule, compute them as French rental income at your household’s progressive rate plus social charges, never deduct a British rental loss against other French income, and claim the treaty credit euro for euro up to the French tax, on income tax and on social charges alike, even where little or no British tax was actually paid. When a French assessment ignores the credit, misstates the base or refuses the social-charges extension, the formal claim and then the administrative court within two months provide a structured path to correction, with the Conseil d’État’s 2020 opinion on the France-UK treaty as your strongest authority. The double charge on your English rents is not a fact of expatriate life. It is a computation, and computations can be checked, challenged and corrected.

Need a quick opinion on your case.

Book a telephone consultation within 48 hours with an avocat of the firm to review your British rents, your NRL1 position and your French treaty credit. Call +33 6 46 60 58 22 or write via our contact page. For background on how UK rental income is declared in France, see our guide to UK rental income for French residents.