Capital Gains Tax for Non-Residents in the UK: Complete Guide (Residential & Commercial Property)
Capital Gains Tax (CGT) for non-residents is an increasingly important area of UK tax compliance, especially for overseas investors, expatriates, and companies holding UK property assets. Since major legislative changes in 2015 and further expansions in 2019 and 2020, non-residents are now widely within the scope of UK CGT when disposing of UK land and property.
This guide explains how non-resident Capital Gains Tax works, who it applies to, how gains are calculated, and provides clear examples for both residential and commercial property disposals.
What is Capital Gains Tax for Non-Residents?
Non-resident Capital Gains Tax (NRCGT) applies when individuals, companies, trustees, or personal representatives who are not UK tax residents dispose of UK land or property.
You may be liable to UK CGT even if you:
Live outside the UK
Receive sale proceeds overseas
Are not UK domiciled
Have no other UK income
HMRC requires non-residents to report disposals of UK property or land, even where no tax is payable or a loss arises.
📌 UK property includes:
Residential property (houses, flats, buy-to-lets)
Commercial property (shops, offices, warehouses)
Mixed-use property
UK land and development sites
Who is Liable for Non-Resident CGT?
You may be within the scope of NRCGT if you are:
An individual living outside the UK
A non-UK resident company (subject to corporation tax rules)
Trustees of offshore trusts
Personal representatives of estates involving UK property
From April 2019 onwards, the rules also apply to indirect disposals, such as selling shares in companies whose value derives mainly from UK property.
Types of UK Property Subject to NRCGT
1. Residential Property
Residential property includes:
Houses and flats
Buy-to-let properties
Holiday homes
Land with residential planning permission
2. Commercial Property
Commercial property includes:
Shops and retail units
Office buildings
Warehouses and industrial units
Agricultural land (non-residential use)
3. Mixed-Use Property
For example:
A shop with a flat above it
Each component is taxed based on its proportion of residential vs non-residential use.
How Non-Resident Capital Gains Tax is Calculated
The gain is generally calculated using:
Step 1: Determine the disposal value
Sale price or market value at disposal
Step 2: Deduct acquisition cost
Original purchase price or market value at acquisition
Step 3: Deduct allowable costs
Legal fees
Stamp Duty Land Tax (SDLT)
Improvement costs (capital only)
Step 4: Apply rebasing rules (if applicable)
For many assets:
Residential property: rebased to April 2015 value
Non-residential property: rebased to April 2019 value
Step 5: Deduct allowable losses
Capital losses brought forward or in-year losses
Step 6: Apply CGT rates
Current UK CGT rates (individuals):
18% (basic rate band)
24% (higher/additional rate)
Residential and non-residential property are now generally taxed at the same rates for individuals.
Example 1: Residential Property Disposal (Non-Resident Individual)
Scenario:
Purchased UK flat in 2014 for £250,000
Sold in 2026 for £450,000
April 2015 market value: £280,000
Allowable costs: £20,000
Step 1: Gain using rebasing
Sale value: £450,000
April 2015 value: £280,000
Gain = £170,000
Step 2: Deduct costs
£170,000 − £20,000 = £150,000 taxable gain
Step 3: CGT payable
Assuming higher-rate taxpayer:
150,000 × 24% = £36,000 CGT
Example 2: Commercial Property Disposal (Non-Resident Individual)
Scenario:
Purchased office building in 2018 for £500,000
Sold in 2026 for £800,000
April 2019 market value: £520,000
Improvement costs: £30,000
Step 1: Gain using rebasing
Sale value: £800,000
April 2019 value: £520,000
Gain = £280,000
Step 2: Deduct improvement costs
£280,000 − £30,000 = £250,000 taxable gain
Step 3: CGT payable
At 24% rate:
250,000 × 24% = £60,000 CGT
Reporting Requirements for Non-Residents
Non-residents must report UK property disposals:
Within 60 days of completion
Using HMRC’s online Capital Gains Tax on UK Property service
Even if no tax is due or a loss is made
Failure to report on time may result in penalties and interest.
Reliefs and Allowances
Depending on circumstances, the following may reduce tax liability:
Annual Exempt Amount (if available)
Private Residence Relief (residential property only)
Capital losses brought forward
Double Taxation Treaty relief (if applicable)
Key Planning Considerations
Non-resident investors should consider:
Timing of disposal (tax year planning)
Rebasing valuation evidence (2015 / 2019 valuations)
Ownership structure (personal vs company)
Use of double tax treaties
Temporary non-residence rules (returning to the UK within 5 years)
UK Capital Gains Tax for non-residents is a complex but highly structured regime that applies broadly to both residential and commercial property.
Understanding rebasing rules, allowable costs, and reporting deadlines is essential to ensure compliance and avoid penalties. Proper tax planning can significantly reduce exposure, particularly for long-term property investors.