UK CGT Rules For non-residents

[Danish Imran]

When selling property in the UK, it’s important to understand how Capital Gains Tax (CGT) applies. Whether you are disposing of a second home, buy-to-let investment, inherited property, or are a non-resident landlord, the tax rules can significantly affect the amount you owe and the deadlines for reporting. Global Tax Consulting’s UK Capital Gains on Property resource offers a comprehensive overview to help you minimise your liability and remain compliant.

What is Capital Gains Tax on Property?

CGT is charged on the profit (or “gain”) you make when you sell or otherwise dispose of a property that has increased in value. The gain is calculated by taking the sale price and deducting:

UK CGT rules for non-residents

Certain allowable costs (such as legal fees, estate agent fees, and stamp duty paid on purchase)

The cost of any improvements (extensions, renovations, structural work)

It is the gain, not the sale proceeds, that is taxable.

CGT Rates on Residential Property

CGT rates differ depending on your income tax band:

Basic rate taxpayers: 18% on residential property gains

Higher and additional rate taxpayers: 28% on residential property gains

For other assets, such as shares, the rates are lower (10% and 20%), which is why property often results in a higher tax burden.

Main Residence vs Second Homes

If the property sold has been your only or main residence, you may qualify for Private Residence Relief (PRR), which can exempt all or part of the gain from tax. However, if you own a second home or a buy-to-let property, the gain is usually fully taxable, subject to any available allowances and reliefs.

Private Residence Relief: Available if the property has been your primary home for the entire period of ownership. If only part of the time qualifies, a proportionate relief may apply.

Lettings Relief: In limited cases, if you let out part of your home, some additional relief may be available, though the scope has been significantly restricted since April 2020.

Reporting and Payment Deadlines

Since April 2020, UK residents selling a residential property must report the gain and pay any CGT due within 60 days of completion. Non-residents must report all UK property disposals, even if no tax is due. Late reporting can lead to interest charges and penalties, making it vital to meet the deadline.

Annual Exempt Amount

Every individual benefits from an Annual Exempt Amount — a tax-free allowance that reduces your taxable gain. For the 2024/25 tax year, the allowance is £3,000 per person. Married couples and civil partners can potentially combine allowances if they own property jointly.

Non-Resident Property Owners

Non-residents are also liable for CGT on UK property disposals. Since April 2015, non-residents must report and pay CGT on UK residential property gains, and since April 2019, this extends to commercial property and indirect disposals. Reporting is mandatory even if there is no tax due, with the same 60-day deadline applying.

Inheritance, Gifting, and Transfers

Passing property on through inheritance or gifting can trigger CGT, depending on the circumstances. While transfers between spouses and civil partners are generally exempt, gifting property to children or others usually counts as a disposal, potentially generating a CGT charge based on market value at the time of the gift.

Planning and Relief Opportunities

With expert planning, there are ways to reduce your CGT exposure:

Making use of PRR where available

Timing disposals to maximise the use of annual exemptions

Splitting ownership with a spouse to access dual allowances

Considering improvements as deductible costs

Reviewing opportunities for reliefs, particularly if the property has been a main home for part of the ownership period

Why Professional Advice Matters

The rules around UK property disposals are complex, especially for landlords, second-home owners, and non-residents. With frequent changes to reporting requirements and reliefs, professional guidance ensures compliance and can significantly reduce your tax liability.

In summary: Capital Gains Tax on UK property is a key consideration when selling, gifting, or transferring residential property. From understanding applicable rates and exemptions to meeting the strict 60-day reporting deadline, property owners must plan carefully to avoid unnecessary costs. Global Tax Consulting’s UK Capital Gains on Property guide provides clear, up-to-date insights to help you navigate the rules confidently, minimise tax exposure, and remain fully compliant.