What Taxes Do British Expats & Non-UK Residents Need to Pay When Buying Property in the UK?

You’ve found the perfect property. The price is right. The rental demand looks strong. But then comes the less exciting part of UK property investment: taxes.

As a British expat, you might assume buying property in your home country is simple. And in many ways, it is, but HMRC never forgets. Whether you’re buying in your personal name or through a limited company, there are tax implications you need to understand upfront.

So, let’s break down what taxes you’ll pay as a non-UK resident/expat, when buying, holding, and selling UK property. Just a note that nothing in this article should be taken as tax or financial advice. We are not tax accountants, so before making any decisions make sure you speak with a qualified accountant.

With that said, let's get into it.

1. Stamp Duty Land Tax (SDLT)

What it is: Stamp Duty is a one-time tax you pay when you buy property in England or Northern Ireland (different systems apply in Scotland and Wales).

Here's what you need to know as a non-UK resident:

• As a non-UK resident, you’ll pay a 2% surcharge on top of normal Stamp Duty rates.

• You’re classed as “non-resident” if you’ve spent fewer than 183 days in the UK in the 12 months before your purchase — even if you’re a British citizen.

• The surcharge applies to residential property — not commercial.

  
  

  We have a post all about Stamp Duty as an Expat or Non-resident, and even show you exactly how much you will need to pay. You can read that here.

  
  

  If you wanted an automated calculator for stamp duty, you can download that for FREE here.

  
  

2. Tax on Rental Income

Once you own the property and start earning rental income, HMRC wants a piece of that too. This is where owning in your personal name vs a limited company makes a huge difference.

If you own the property in your personal name:

• You’ll pay UK income tax on net rental profits (rent minus allowable expenses like letting agent fees, insurance, repairs, etc.).

  
  

• Tax bands are the same as for UK residents:

  • 20% basic rate (up to £50,270)

  • 40% higher rate

  • 45% additional rate

    
    

• Mortgage interest relief is limited to a 20% tax credit, not a full deduction (unlike company structures). This means that you get taxed on a higher figure in your personal name compared to a limited company - generally speaking.

  
  

If you own through a limited company:

• You’ll pay corporation tax (currently 19-25% in most cases) on company profits.

  
  

• Mortgage interest is fully deductible from the rental income, which can make this route more tax-efficient for higher-rate taxpayers.

  
  

• If you're going back to the UK to view or do any work on the property? That is also a deductible in the majority of cases. Again, check with you accountant first.

  
  

Heads up: If you want to take the profits out of the company personally (e.g. as dividends), you may pay additional tax, so getting the right structure matters. If you want us to introduce you to an accountant, just reach out to us here.

Want help deciding between personal vs LTD company? We wrote an article on this topic to help you decide. We can set up your Ltd company up for you correctly here.

3. Capital Gains Tax (CGT) When You Sell

Yes, even from abroad, if you sell UK property at a profit, you can be liable for Capital Gains Tax.

Selling in personal name:

• Non-residents must report and pay CGT on UK residential property within 60 days of sale.

• The CGT rate is 18% (basic rate) or 28% (higher/additional rate) depending on your total income.

• You get an annual CGT allowance (currently £3,000 for 2025–26), and you can deduct allowable costs like solicitor fees, estate agent fees, and capital improvements.

  
  

Note: If the property was your former main residence, you might qualify for partial private residence relief, so the full gain may not be taxed.

We put together a guide on CGT if you want to dive into this a bit further. You can get that here.

Selling via a limited company:

• The company pays corporation tax (19-25%) on gains, not CGT.

• There are no annual allowances, but you can offset professional fees, purchase/sale costs, and other expenses.

• So if your company made a loss in the year, even though you sold a property and made money on that individual property, you pay no tax.

We can set up your Ltd company up for you correctly here.

4. Do I Need to File a UK Tax Return?

If you buy with your personal name, in most cases, yes.

If you receive UK rental income, even if you live abroad, you must register with HMRC and file a UK Self Assessment tax return.

If you use a limited company, the company must file:

• Annual accounts with Companies House

• A corporation tax return with HMRC

A good accountant can help with this for a one-off yearly cost. We link all of our clients with an accountant to get them fully set up and running legit. If you want linking with our accountant, just drop us a note here.

Double Taxation Agreements

Worried about being taxed twice. once in the UK and again where you live (e.g. UAE, Australia, or Switzerland)?

Good news: The UK has Double Taxation Treaties with most countries, which usually means:

• You only pay tax in one country, or

• You get a tax credit in your country of residence for UK tax paid

  
  

This is where a good accountant is worth their weight in gold. We can connect you with one if you reach out to us here.

Personal Name or Limited Company: Which Is Better?

There’s no one-size-fits-all answer.

But here’s a general answer: If you're looking to buy more than 2 properties and hold for more than 5 years - a Ltd company may make more sense. We can set up your Ltd company up for you correctly here.

If you're looking to buy 2 or less and sell quickly, personal name may make more sense.

We walk through this with every client to help you make the most efficient decision, both short and long-term with the help of tax accountants.

We have put together a guide on how to determine what is best here - check it out!

Final Thoughts: Plan Now, Thank Yourself Later

While there are no restrictions on non-UK residents buying property in the UK, there are tax traps, and the wrong structure can cost you thousands down the line.

So whether you’re:

• Earning AED in Dubai,

• Counting Swiss francs,

• Or building a passive income pipeline from the beach in Australia…

  
  

Make sure you understand what taxes apply, what’s deductible, and whether a limited company structure makes sense for your goals.

Need help?

At Expat Property Investments, we help British expats and non-UK nationals around the world invest in UK property the smart way by:

• Finding profitable deals

• Structuring purchases tax-efficiently, with the help of accountants

• Securing non-UK resident mortgages, with the help of mortgage brokers

• Handling the entire investment from viewings to a tenant paying rent

Book a free discovery call with us here and let us walk you through the best path for your situation.

And if you're new to all this, check out:

• Step-by-step guide to buying UK property as a British expat

• How to get a buy-to-let mortgage as a British expat

  
  

You’ve worked hard for your income — now let’s make it work hard for you.