This article is designed to be a brief guide to the taxes that apply to UK property, all in one place.  This is written specifically for the benefit of non-residents of the UK.

I have covered this topic before but tax rules change regularly and it is important that we keep up to date. This article is corect as at April 2026.

You may not be living in the UK, or be “UK resident for tax purposes” but that does not mean you do not have a liability to certain UK taxes.

There are various taxes that apply with in relation to the ownership of UK property and an overview of each of the main ones is set out below.

Income tax

Anyone who receives rental income from a property is liable to UK income tax as this is “income arising in the UK”.

UK citizens are eligible for a Personal Allowance and only income above this amount is liable for tax.

This Personal Allowance also applies to citizens of various other countries where an appropriate Dual Taxation Agreement is in place but this does not apply to all nationalities.

For the tax year 2026/27, ending 5^th April 2027, the Personal Allowance is £12,570. It has been announced that this would be frozen until 2028.

If a property is jointly owned, then two sets of Personal Allowances can be used in order to reduce the tax payable. The Allowance can be spread across multiple properties.

Anyone who owns a property in the UK and rents it out should complete the paperwork for the HMRC Non-Resident Landlord Scheme which is an arrangement for taxing the UK rental income of non-resident landlords. Standard practice is for rental income to be deducted at source, but non-residents don’t usually have earned income and it is simpler to receive the rental income gross rather than reclaiming tax.

Once you have registered to receive the rent to be paid without the deduction of income tax and you declare the income on your tax return.

Working out the declarable income

UK property income can be reduced by offsetting allowable expenses, such as letting agent fees, repairs, insurance, and maintenance, directly against rental income.

Costs incurred wholly and exclusively for renting out the property can be deducted from income. This includes repairs, cleaning, insurance, council tax, utilities, and advertising.

While residential landlords get a 20% tax credit for mortgage interest rather than full deduction, loans for renovations, business operations, or purchasing furniture can still be fully deducted.

You need to keep records for all expenses.

For assistance on preparing a UK Self Assessment tax return, see this article:

UK tax returns. A low-cost service

Capital Gains Tax

Substantial changes to how Capital Gains Tax (CGT) is levied on UK property took effect in April 2015. That’s quite a while ago but I regularly come across people who are not up to date.

In essence, any property that is not a Principle Private Residence for the full period of ownership is likely to be liable for CGT on sale. If a property is only let for a limited period of no more than nine months and/or becomes your home again you would need to specifically review the liability.

Note that simply moving back into a property does not exempt you from capital gains for the period that you were not living in it.

Any property that is not your main residence that is sold after 6^th April 2015 will have a liability to gains from this date, or the date of purchase if later, to the date of sale.

Non-resident individuals are entitled to the same annual CGT exemption as UK residents.

The allowance has reduced substantially in recent years with effect from April 2024, now stands at just £3,000 per person per tax year, from

If a property is jointly owned then two allowances apply.

For gains above the allowances, the rates of tax for capital gains on a property sale are 18% and 24%, depending on your marginal rate, that is the rate of tax applied to any UK income in the relevant tax year, and the amount of the gain itself.

Property disposals must be reported and paid to HMRC within 60 days of completion of the sale. Failure to declare will result in penalties.

Stamp Duty

Stamp Duty is a tax on property purchase and applies across the UK on a sliding scale.

Stamp Duty is the generic term but is strictly Stamp Duty Land Tax (SDLT) in England and Northern Ireland, Land and Buildings Transaction Tax (LBTT) in Scotland and Land Transaction Tax (LTT) in Wales.

The rates and levels are the same in England and Northern Ireland but Wales and Scotland have their own rates.

For example, if you own a property in the UAE and buy your first property in the UK, this will be deemed a second property for the purposes of Stamp Duty calculations.

To be deemed a true first-time buyer, you must not have owned (or part-owned) a property anywhere in the world before, even if it was bought for you, you bought it without a mortgage or inherited it.

For any first-time buyer Stamp Duty discounts to apply you must also be buying your home and be tax resident in the UK.

If you already own one property, you will pay a surcharge on a second or subsequent properties.

There are different systems and rates in the UK, depending on where the property is located. England and Northern Ireland are the same but Wales and Scotland have their own systems

Stamp Duty Land Tax in England and Northern Ireland

Purchase price of property	Rate of Stamp Duty	Buy to Let/ Additional Home Rate
£0 – £125,000	0%	3%
£125,001 to 250,000	2%	5%
£250,001 – £925,000	5%	8%
£925,001 – £1.5 million	10%	13%
£1.5 million & over	12%	15%

A 3% Stamp Duty (SDLT) surcharge applies to additional residential properties (buy-to-let or second homes) over £40,000 in England and Northern Ireland. This is added on top of standard rates.

Non-UK residents face an additional 2% surcharge

The tax is charged on a progressive basis. For example, a UK resident buying their home in England for £400,000 would pay nothing on the first £125,000, 2% on the next £125,000 and then 5% on the remaining £150,000.

If the UK property will be your only or main home, and you are replacing your previous main residence, you may avoid the 5% additional property rate.

If you keep an overseas property, the purchase will still count as an additional property, and the 5% surcharge applies alongside the 2% non-resident surcharge.

UK residents who are genuine first-time buyers, can benefit from a lower rate in England and Northern Ireland:

• Properties up to £300,000: 0% SDLT.
• Properties £300,001 – £500,000: 0% on the first £300,000, 5% on the remaining balance.
• Properties over £500,000: Full standard stamp duty rates apply

Land and Buildings Transaction Tax in Scotland

Purchase price of property	Rate of LBTT	Buy to Let/ Additional Dwelling Rate
£0 – £145,000	0%	8%
£145,001 – £250,000	2%	10%
£250,001 – £325,000	5%	13%
£325,001 – £750,000	10%	18%
Over £750,000	12%	20%

First-time buyers in Scotland benefit from an exemption on LBTT on properties up to £175,000. If the purchase price exceeds £175,000, first-time buyers pay standard LBTT rates only on the portion above that amount.

The Additional Dwelling Supplement (ADS) remains at 8% for properties costing £40,000 and over. It applies to buy-to let properties.

 Land Transaction Tax in Wales

Purchase price of property	Rate of LBTT	Buy to Let/ Additional Dwelling Rate
£0 – £225,000	0%	4% up to £180,000, then 7.5%
£225,001 – £400,000	6%	9%
£400,001 – £750,000	7.5%	11.5%
£750,001 – £1.5 million	10%	14%
Over £1.5 million	12%	16%

Different rates can apply for land or commercial property.

All of my clients are provided with the correct figures based on their specific circumstances.

It is important to have made proper provision for the various costs from outset and to understand ongoing and future tax liabilities.

My clients are provided with information on all tax issues at the start of the process so there are never any surprises. Having all the facts matters

One of the professional services I offer alongside advising on suitable investment property as part of general financial planning is an overview of personal taxation in the UK.

If you want to know that your capital gains tax liability would be on the sale of any UK property, or the potential tax on rental income, please get in touch.

How do you know if you are tax resident in the UK?

This is not a silly question as there is much more to it than having a home abroad.

In all cases we need to consider your tax residency. You don’t just become UK non-resident for tax by hopping on a plane. (See next article, coming soon.)

Tax residency for the UK is defined in the Statutory residency Test which came into effect in April 2013.

I come across a significant number of people who believe you can spend 90 days in the UK in any tax year before becoming resident butt that is out of date and could be very different.

The Statutory Resident Test has various parts that need to be considered. In some cases, an individual may be able to spend 183 days in the UK before being UK tax resident. In others it could be just 45 days. If you are working in the UK for part of a tax year, you could end up being treated as UK tax resident after just 40 days

Getting it wrong can be costly.

It can be worth establishing your tax position, so you are clear. Get in touch for proper advice.

UK property

For a quick summary of why to buy property in the UK, take a look at this very short clip. It features me talking about why UK property makes sense and why you should talk to us. It’s under three minutes long.

https://www.youtube.com/watch?v=Gy3P3Yn-LnU

Despite significant upfront costs, UK property can still be a worthwhile investment – provided you get it right. Not all property is equal and that is where I come in.

You need to buy the right property, in the right place. The UK property market is steady and low-risk but returns, of both capital and rent achievable, vary.

As an expat, you can still invest in UK property with a deposit of just 5%. The usual requirement for non-resident is for a deposit of 30% but you can get on the UK property ladder for much less.

For further information on investing in property in the UK please see these articles:

UK property investment. 10 reasons why it makes sense

Worth every penny: Wolverhampton property

A great UK property opportunity with a deposit of just 5%

To arrange a discussion about investing in UK property, taxation, or on any aspect of your personal financial planning, please email me at keren@holbornassets.com  or use the contact form below

Most meetings take place over Zoom which is great for everyone’s time management and sheer convenience.

Tax advice is a fee-based service. This makes it fully independent.

 

I write articles such as this one as part of the holistic personal financial planning service and that I provide to expats in the UAE and wider GCC, and the general consumer, financial and legal information that I provide in The National newspaper, on radio, in other media, and on the Facebook group British Expats Dubai &UAE.

 Serious topics, all the facts, friendly conversation.

Please take a look at the other useful articles on this website.

The information in this article is correct at time of writing and is always subject to change. You should not construe any information or other material on this website as legal, tax, investment, financial, or other advice.

This article does not constitute advice. E&OE

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