Non-Resident Capital Gains Tax on UK Property 2026

The Non-Resident CGT Regime

For many years, non-UK residents who owned UK property could sell it without paying UK Capital Gains Tax. This changed in stages:

• April 2015: CGT extended to non-residents disposing of UK residential property.
• April 2019: CGT (and for companies, Corporation Tax) extended to non-residents disposing of all UK property and land, including commercial property.

In 2026, the non-resident CGT (NRCGT) regime is fully established and applies to:

• Individuals who are not UK resident in the tax year of disposal.
• Trustees of non-UK resident trusts disposing of UK property.
• Non-UK resident companies disposing of UK property (Corporation Tax applies, not CGT).
• Partners in non-resident partnerships.
• Collective investment vehicles (with specific rules depending on their structure).

The rules apply regardless of whether the property is rented out, used personally, or simply held as an investment.

CGT Rates for Non-Residents in 2026/27

Non-resident individuals pay CGT on UK property gains at the same rates as UK residents:

• Residential property: 18% (basic-rate band) or 24% (higher rate).
• Commercial property and other UK land: 18% (basic-rate) or 24% (higher rate).
• Business Asset Disposal Relief (BADR): 18% flat rate for qualifying business asset disposals (commercial property used in a business, in limited circumstances).

The rate depends on the individual's total UK taxable income and gains in the tax year. A non-resident with no UK income will use their UK personal allowance and basic-rate band to determine whether the 18% or 24% rate applies.

The Annual Exempt Amount (AEA) for individuals in 2026/27 is GBP 3,000. This reduces the taxable gain but is small compared to typical property gains.

The 60-Day Reporting Requirement

Since 27 October 2021, any disposal of a UK residential property that gives rise to a CGT liability (or would give rise to one if a gain existed) must be reported to HMRC within 60 days of the completion date. This applies to both UK residents and non-residents.

Before 27 October 2021, the window was 30 days (introduced in April 2020). The extension to 60 days was widely welcomed.

The return is filed through HMRC's online Capital Gains Tax on UK property service. The non-resident must:

1. Register for the service (separate from self-assessment) if they have not done so.
2. Calculate the gain (or loss) on the disposal.
3. Estimate their total UK taxable income for the year to determine the applicable rate.
4. File the return and pay any CGT due within 60 days.

For commercial property, there is currently no 60-day reporting requirement -- the gain is reported via the non-resident's UK tax return or through a specific non-resident return. However, the government has proposed extending the 60-day window to commercial property; check GOV.UK for the current position.

Calculating the Gain

The basic calculation is:

Gain = Disposal proceeds - Acquisition cost - Allowable costs

Allowable costs include:

• Solicitor and agent fees on purchase and sale.
• Stamp Duty Land Tax paid on acquisition.
• Capital improvement costs (not repairs -- only work that adds value).
• Costs of establishing or defending legal title.
• Agent and marketing costs on disposal.

For non-residents, the gain on residential property can be calculated in one of three ways:

Method 1: Rebasing to April 2015

Use the market value of the property on 5 April 2015 as the base cost, instead of the original acquisition price. This limits the taxable gain to the period since April 2015.

Method 2: Straight-Line Apportionment

Apportion the total gain (from original acquisition to sale) on a time basis, treating only the fraction of the ownership period from April 2015 to the sale date as taxable.

Method 3: Full Original Cost

Use the full original acquisition cost and compute the entire gain from purchase to sale, as if the rebasing rules did not exist.

Non-residents can elect which method to use. The election must be made on the CGT return. Method 1 (rebasing) is most common and usually most beneficial for property held before April 2015 that has risen significantly in value. However, if the property fell in value between purchase and April 2015, rebasing could create a larger gain -- in that case, Method 3 (full gain from original cost) might produce a lower taxable gain.

Worked Example: Non-Resident Selling UK Residential Property

Maria is an Italian resident who bought a UK flat in January 2010 for GBP 150,000 (plus GBP 3,000 in purchase costs). She sells it in October 2026 for GBP 380,000 (net of agent and solicitor fees of GBP 8,000). She made no capital improvements.

Market value on 5 April 2015: GBP 220,000.

Method 1 (Rebasing to April 2015):

• Base cost: GBP 220,000
• Sale proceeds (net): GBP 372,000 (GBP 380,000 - GBP 8,000)
• Gain: GBP 372,000 - GBP 220,000 = GBP 152,000
• Less AEA: GBP 3,000
• Taxable gain: GBP 149,000

Method 3 (Full original cost):

• Base cost: GBP 153,000 (GBP 150,000 + GBP 3,000)
• Sale proceeds (net): GBP 372,000
• Gain: GBP 372,000 - GBP 153,000 = GBP 219,000
• Less AEA: GBP 3,000
• Taxable gain: GBP 216,000

Maria should elect Method 1. Taxable gain: GBP 149,000.

CGT rate: Maria has no UK income. Her basic-rate band is GBP 37,700. Using her personal allowance of GBP 12,570 and the basic-rate band:

• GBP 37,700 at 18%: GBP 6,786
• Remaining gain: GBP 149,000 - GBP 37,700 = GBP 111,300 at 24%: GBP 26,712
• Total CGT: GBP 33,498

Maria must file the return and pay GBP 33,498 within 60 days of the October 2026 completion date.

Private Residence Relief for Non-Residents

Private Residence Relief (PRR) exempts all or part of a gain on a main home from CGT. Non-residents can claim PRR for periods when the UK property was their main home, but with a significant restriction: the non-resident day-count test.

For a UK property to qualify as the main home in a particular tax year when the owner is non-resident, the owner must have spent at least 90 days in the UK during that tax year. This is the "Statutory Residence Test" additional condition for non-residents claiming PRR.

For example, if Maria lived in the UK flat as her main home until 2018, returned to Italy, and now sells in 2026 -- the PRR applies to the period of actual main home use. The final 9 months of ownership also qualify for PRR (the "final period exemption" under current rules). For the letting period after she moved to Italy, PRR does not apply.

Lettings relief -- which previously allowed up to GBP 40,000 of additional CGT relief for periods of letting a former main home -- was restricted from April 2020 and now only applies in very limited shared-occupancy situations.

Non-Resident Companies Selling UK Property

Non-resident companies have paid UK Corporation Tax on gains from UK property since April 2019, for both residential and commercial disposals. This represented a significant change -- before April 2019, non-resident companies were liable to NRCGT (at the CGT rate) only on residential property.

For non-resident companies in 2026/27:

• CT at 19% for profits below GBP 50,000.
• CT at 25% for profits above GBP 250,000.
• Marginal relief between GBP 50,000 and GBP 250,000.

Companies can also rebase to April 2019 (not April 2015) for commercial property gains, since the commercial property regime only started in April 2019.

Indirect Disposals -- The 75% Test

Since April 2019, NRCGT also applies to "indirect disposals" -- where a non-resident disposes of shares or interests in a company or partnership that derives 75% or more of its gross asset value from UK land. This is designed to prevent non-residents from avoiding NRCGT by holding UK property through a foreign company.

For example, if a non-resident owns shares in a Cayman Islands company that holds UK property worth GBP 10 million, selling those shares is treated as an indirect disposal of UK land and is subject to NRCGT (or Corporation Tax if the seller is a company).

The 75% test looks at the company's gross assets at the time of disposal. Companies with substantial non-property assets alongside UK property may fall below the 75% threshold and escape the indirect disposal rules.

Penalties for Late Filing and Payment

HMRC takes the 60-day deadline seriously. Penalties for late filing of the property CGT return include:

• Day 61 -- 3 months late: Automatic GBP 100 penalty.
• 3 -- 6 months late: Daily penalties of GBP 10 per day (up to GBP 900).
• 6 months late: GBP 300 or 5% of the tax due (whichever is higher).
• 12 months late: A further GBP 300 or 5% (whichever is higher).

Interest on unpaid CGT runs from 60 days after completion at HMRC's late payment interest rate (currently base rate plus 2.5%).

Summary

The non-resident CGT regime is now mature and well-established in 2026. All disposals of UK property by non-residents -- residential and commercial -- trigger a CGT liability (or Corporation Tax for companies) and a 60-day reporting obligation.

The rates are 18% and 24% for individuals, depending on income level. The annual exempt amount is GBP 3,000. The rebasing election to April 2015 (residential) or April 2019 (commercial) can significantly reduce the taxable gain for long-held properties.

Non-residents selling UK property should ensure they understand the 60-day clock from the completion date, calculate the gain using the most favourable method available, and check the double tax treaty position with their country of residence to avoid paying tax twice on the same gain.

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