UK Property Tax for Non-Resident Investors: Income, Gains, Stamp Duty and Reporting
Living outside the UK does not take UK property outside UK tax. A non-resident investor pays UK tax on UK rental profits, on gains when the property is sold, and on development profits from UK land. Non-resident companies pay UK corporation tax on both rent and gains. Buyers also pay a two-point stamp duty surcharge on homes, and since 6 April 2025 inheritance tax depends on how long someone has lived in the UK rather than their domicile.
None of that makes the UK unattractive. It makes it predictable, provided the filings are made on time. Most of the penalties overseas investors pay are for missed deadlines, not for the tax itself.
The five UK taxes an overseas investor meets
| Tax | Individuals | Companies | Key date or rule |
|---|---|---|---|
| Tax on rental profits | Income tax at 20% / 40% / 45%; property rates of 22% / 42% / 47% from 6 April 2027 | Corporation tax at 19% to 25% | Non-resident companies moved from income tax to corporation tax on 6 April 2020 |
| Collection of tax on rent | Non-resident landlord scheme, unless approved to receive rent gross | Same, on form NRL2 | Agent or tenant deducts basic-rate tax |
| Tax on gains | Capital gains tax at 18% or 24% | Corporation tax | All UK land since April 2019; report within 60 days of completion |
| Profits from developing or dealing in UK land | Income tax | Corporation tax | Taxable whether or not you have a UK base, since 5 July 2016 |
| Stamp duty on purchase (England and NI) | Higher rates plus 2 points on homes | Same; 17% plus 2 points on homes over £500,000 without relief | Surcharge since 1 April 2021 |
Rental income and the non-resident landlord scheme
HMRC treats a landlord whose "usual place of abode" is outside the UK as non-resident for this scheme. For individuals that normally means being away for six months or more.
Under the scheme, the UK letting agent deducts tax at the basic rate from the rent, after allowable expenses, and pays it to HMRC each quarter. If there is no agent and the tenant pays more than £100 a week, the tenant has to do it. Landlords can apply to receive rent without deduction, on form NRL1 (individuals), NRL2 (companies) or NRL3 (trustees). Approval does not remove the tax: it means the landlord files a UK return and pays the tax through it.
Non-resident companies have paid corporation tax rather than income tax on UK property income since 6 April 2020. That brought them into the corporate rules on losses and interest, including the corporate interest restriction, which does not bite while net interest is under £2 million a year.
Gains: everything is in, and the 60-day clock
The UK has taxed non-residents on gains from UK homes since April 2015, and on all UK land, including commercial property, since April 2019. It also taxes "indirect" disposals: selling shares in a company that is property-rich (at least 75% of its gross asset value is UK land) where you have at least a 25% interest.
For property held before the rules began, the gain is normally worked out from the market value at the start date: 5 April 2015 for homes and 5 April 2019 for commercial property and indirect disposals.
The trap is the deadline. A non-resident must report every direct or indirect disposal of UK land within 60 days of completion, even if there is no tax to pay or the sale made a loss. Non-resident companies pay corporation tax on the gain instead of capital gains tax.
Development profits
Since 5 July 2016, profits from a trade of dealing in or developing UK land are taxable in the UK regardless of whether the company or individual is UK resident or has a permanent establishment here. An overseas company that buys a site, builds flats and sells them pays UK corporation tax on the development profit. Our guide to trading versus investment explains where the line falls.
Stamp duty for overseas buyers
On top of the higher rates for additional dwellings, non-UK residents pay two more percentage points on residential purchases in England and Northern Ireland. An individual is non-resident for this test after fewer than 183 days in the UK in the 12 months before buying. The surcharge does not apply to commercial or mixed-use property. Full rates and examples are in our guide to stamp duty for property investors.
Transparency: the Register of Overseas Entities
Since 1 August 2022, an overseas company or other entity that owns UK land must register with Companies House and declare its beneficial owners or managing officers, under the Economic Crime (Transparency and Enforcement) Act 2022. An entity that does not comply faces restrictions on buying, selling, leasing or charging its UK property. In practice, a lender or buyer will check the register before completing. Owning UK property through an overseas company is legitimate; owning it anonymously is not.
Inheritance tax
From 6 April 2025 the UK replaced domicile with a residence test for inheritance tax. Someone who has been UK resident for at least 10 of the previous 20 tax years is a long-term resident, and their worldwide assets are within UK inheritance tax, with a tail of up to 10 years after they leave.
UK property is within inheritance tax whoever owns it. Holding a UK home through an overseas company does not change that: since 6 April 2017 shares in an overseas close company are not excluded property to the extent their value comes from UK residential property. From 6 April 2026 the same applies to UK agricultural property. For more on planning, see our guide to inheritance tax for property and family offices.
Who it applies to, and the pitfalls
| Investor | Main obligations | Common pitfall |
|---|---|---|
| Overseas individual letting a UK flat | NRL scheme or approval; UK tax return | Agent not told the landlord moved abroad, so no tax deducted |
| Overseas company letting UK property | Corporation tax return; NRL2 approval | Not registering for corporation tax when the business starts |
| Any non-resident selling UK property | Return within 60 days of completion | Missing the deadline because no tax was due |
| Overseas company developing a UK site | Corporation tax on the trading profit | Assuming the profit is a capital gain, or outside UK tax |
| Overseas entity buying UK land | Register of Overseas Entities first | Registration not in place before exchange |
| Long-term UK resident moving abroad | IHT tail on worldwide assets | Assuming leaving the UK ends IHT exposure immediately |
Building in London from overseas
Many of our clients invest from abroad, and the practical problem is rarely tax. It is running a project in London from another time zone. We act as a single point of contact from feasibility to handover: development management to run the scheme on your behalf, development feasibility and site appraisal before you buy, and an in-house construction team to build it. If you are investing from overseas, our free Investor & Developer guide explains how we work with investors, and our page on investment opportunities in redevelopment shows the kind of schemes we take on.
