Form 1040-NR: US income without US residence.
Form 1040-NR is the return for nonresident aliens with US-source income — a UK resident letting a US property, a former resident closing out a departure year, or anyone whose US withholding was heavier than the treaty allows.
Figures on this page are stated for tax year 2025/26 UK · 2025 US. Thresholds change annually.
Two kinds of income, two sets of rules
Income effectively connected with a US trade or business — including rental property where the net election is made — is taxed at graduated rates after deductions. Everything else, so-called FDAP income such as dividends, interest and royalties, is taxed at a flat 30% on the gross amount unless a treaty reduces it.
The US-UK treaty cuts that 30% substantially for most passive income, but only where the payer holds a valid Form W-8BEN. Where withholding has already been taken at the full rate, the 1040-NR is how the overpayment is reclaimed.
- Rental property, with or without the net-basis election
- US real estate sales and FIRPTA withholding refunds
- Treaty-reduced rates on dividends, interest and pensions
Departure years and dual status
The year you arrive in or leave the United States is usually dual-status: part of it filed as a resident on Form 1040, the rest as a nonresident on Form 1040-NR, with one attached to the other as a statement.
Dual-status years carry restrictions — no standard deduction, no joint filing — and they are the years where careful sequencing of income and gains makes the biggest difference. They are also where the expatriation forms land if a Green Card was surrendered.
Questions we get about this
Not always, but usually it is worth filing. Withholding at 30% on gross income frequently exceeds the treaty rate or the tax that would be due on a net basis.
The return is how the difference comes back, and the refund window is limited.
A 1040-NR reporting the rental. Making the net-basis election lets you deduct mortgage interest, depreciation, agent fees and repairs rather than being taxed at 30% of gross rent.
The same property also belongs on your UK Self Assessment, with credit relief bridging the two.
If you have no Social Security number, yes - the return and most treaty claims require a taxpayer identification number.
The application can be filed alongside the return with certified identity documents, which avoids sending your passport away.
15 April where you had wages subject to withholding, otherwise 15 June. An extension to 15 October is available on request.
Late 1040-NR filings can forfeit deductions and treaty benefits entirely, so this is one deadline worth keeping.
Related pages
- Service
1040-X amended returns
Form 1040-X amended return preparation: claiming missed foreign tax credits and exclusions, fixing PFIC and treaty errors, and the three-year refund window.
- Pillar guide
Tax specialists for US and UK
What US and UK tax specialists handle that a general accountant does not: residence tests, treaty relief, FBAR, PFICs, pensions, property and catch-up filings.
- Service
Property & capital gains
Cross-border property and capital gains: selling a home, rental income, currency gains and the 60-day UK reporting deadline, handled on both returns.
- Who we help
Landlords & property owners
Rental property across the US and UK: dual reporting, depreciation differences, non-resident schemes and currency gains on sale.
- Glossary
FBAR: definition
The Foreign Bank Account Report — FinCEN Form 114 — and its $10,000 aggregate trigger.
- Who we help
Investors & fund holders
Investing across the US and UK: PFICs, reporting funds, withholding recovery and building a portfolio both systems tolerate.
Further reading
- The dividend withholding rate under the US-UK treaty, explained
The treaty sets three possible caps on US dividend tax for UK investors: 15%, 5% and zero. Which one applies depends entirely on who owns the shares.
- UK rental income and the depreciation trap on your US return
The same tenant and the same rent produce two different profit figures. Depreciation is the widest gap, and its effect follows you all the way to the sale.
- Treaty Article 17: how the US and UK tax your pension income
Periodic pensions, lump sums and social security each follow a different rule in Article 17 - and the saving clause rewrites two of them for US citizens.
Official sources
Last reviewed · Figures stated for tax year 2025/26 UK · 2025 US. Thresholds and rates change annually — check figures against the current tax year before relying on them.
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