UK Property Tax for International Buyers: The Seven Things That Matter
An overseas buyer signing on a London flat may face up to seven distinct tax exposures. None are insurmountable. All reward early planning.
London property is one of the most resilient asset classes available to global private capital. It is also one of the most layered with tax. The good news: none of these taxes are hidden. They are published, predictable, and plannable. The bad news: they interact with each other in ways that regularly catch buyers unprepared.
This page summarises the seven key tax exposures from our full research guide. Download the complete guide for full rate tables, worked examples, and planning notes. If you are also a resident in Italy, see our Italian cross-border tax guide.
The seven taxes at a glance
| Tax | When it applies | Headline rate |
|---|---|---|
| SDLT (Stamp Duty) | At purchase | Up to 19% for non-resident buyers on high-value property |
| CGT (Capital Gains Tax) | At sale | 24% (higher rate) for non-residents on residential gains |
| IHT (Inheritance Tax) | On death | 40% above GBP 325,000 nil-rate band |
| Income Tax on rental income | While renting | Up to 45% (individual); Non-Resident Landlord scheme applies |
| ATED (Annual Tax on Enveloped Dwellings) | Annually (corporate ownership) | GBP 3,700 to GBP 236,250 depending on property value |
| Council Tax | Annually | Varies by borough; premiums apply on empty/second homes |
| Non-resident CGT filing | Within 60 days of sale | Mandatory return and payment; penalties for late filing |
SDLT: the purchase cost that surprises most buyers
Stamp Duty Land Tax is paid by the buyer at completion. For non-resident overseas buyers, three layers stack: standard residential rates, a 2% non-resident surcharge (introduced 2021), and a 5% additional dwelling surcharge, raised from 3% in October 2024, if the buyer already owns property anywhere in the world. On a GBP 2 million London flat, the combined SDLT bill for a non-resident buying an additional property is roughly GBP 293,750, close to 15% of the price, before any other costs.
CGT: the 60-day rule most sellers miss
Non-resident individuals pay CGT on gains from UK residential property at 18% (basic rate) or 24% (higher rate). The rule that catches buyers: a CGT return must be filed and any tax paid within 60 days of completion of the sale, not at the end of the tax year. Late filing penalties start immediately. There is no minimum gain threshold. Source: HMRC; UK Property Tax Guide 2026, Performa Capital Research.
IHT: the regime that changed in 2017
UK Inheritance Tax applies to the value of UK residential property at 40% above the GBP 325,000 nil-rate band, regardless of where the owner lives or is domiciled. A structural change in 2017 closed the most common planning route: owning UK property through a non-UK company no longer shelters it from IHT. The property is now treated as a UK asset for IHT purposes regardless of the ownership structure. Source: HMRC; UK Property Tax Guide 2026, Performa Capital Research.
The end of non-dom: what replaced it
The non-domiciled tax regime was abolished in April 2025. It has been replaced by a four-year Foreign Income and Gains (FIG) regime. New UK tax residents can shelter foreign income and gains for their first four years of UK residence, after which they are taxed on worldwide income like any other UK resident. Existing non-dom arrangements have largely ceased. Anyone who relied on non-dom status for property planning should review their position. Source: UK Property Tax Guide 2026, Performa Capital Research.
How to pay less tax on a London property, legally: the levers the law itself provides
How to pay less tax on UK property is one of the most searched and worst answered questions in the market. The serious answer has nothing to do with tricks: it lies in the reliefs the law itself provides, which most international buyers never use because nobody names them. And almost all of them apply wherever you live: a London property sits within the UK tax perimeter regardless of the owner’s residence. The exceptions are flagged. The main ones:
The right ownership structure, before completion. Individual or company changes everything: a company deducts mortgage interest in full (individuals are limited to a 20% credit under Section 24) and pays corporation tax at 19-25% instead of personal rates up to 45%. In exchange it brings ATED filings and running costs. This decision is made before the purchase, not after.
Spousal transfers. Transfers between spouses and civil partners trigger neither CGT nor IHT in the UK: used well, they let a couple use two allowances and two rate bands instead of one. This works for couples living entirely outside the UK as well: the GBP 325,000 cap only bites where the spouses have different long-term residence status before HMRC.
The 7-year rule. Lifetime gifts fall outside the UK IHT estate if the donor survives seven years, with taper relief starting from year three; the rule covers UK property whoever and wherever the owner is (note: gifting a UK property is also a disposal for UK CGT).
The FIG window, the one lever reserved for those relocating. Those becoming UK tax resident after a long period abroad can qualify for four years of exemption on foreign income and gains: for anyone planning a move, the calendar itself is a tax lever.
Portfolios of six or more units. Buying six or more dwellings in a single transaction moves SDLT onto non-residential rates, far below the surcharged residential ones.
And one thing that no longer works: Multiple Dwellings Relief, for years the most quoted SDLT shortcut, was abolished from June 2024. Anyone still proposing it is working from old information.
Every one of these levers has conditions, exceptions and cases where it does not pay. The full guide covers each with the numbers; and before acting, a qualified tax adviser is not a courtesy, it is part of the return.
Common questions
How much stamp duty do international buyers pay in London?
Non-resident buyers pay standard SDLT rates plus a 2% non-resident surcharge, and a further 5% additional dwelling surcharge (raised from 3% in October 2024) if they already own property. On a property over GBP 1.5 million, the combined marginal SDLT rate can reach 19%. Source: UK Property Tax Guide 2026, Performa Capital Research; HMRC.
Do non-residents pay CGT when selling a London property?
Yes. Non-residents pay Capital Gains Tax at 24% (higher rate) on gains from UK residential property. A CGT return must be filed and any tax paid within 60 days of completion. Source: UK Property Tax Guide 2026, Performa Capital Research; HMRC.
Does the non-dom regime still apply in 2026?
No. The non-domiciled regime was abolished in April 2025 and replaced by a four-year Foreign Income and Gains (FIG) regime. New UK tax residents may shelter foreign income for their first four years. Existing non-dom arrangements have largely ceased. Source: UK Property Tax Guide 2026, Performa Capital Research.
Is UK inheritance tax a risk for overseas property owners?
UK Inheritance Tax (IHT) applies at 40% on the value of UK residential property above the GBP 325,000 nil-rate band, regardless of the owner s domicile. Ownership via a non-UK company no longer provides a shield, following reforms introduced in 2017. Source: UK Property Tax Guide 2026, Performa Capital Research; HMRC.
How can I pay less tax on a London property?
Not with tricks but with the reliefs the law provides: choosing between individual and company ownership before completion, spousal transfers (no CGT or IHT in the UK), the 7-year rule on lifetime gifts, the 4-year FIG window for new UK residents, and non-residential SDLT rates on purchases of six or more dwellings. Multiple Dwellings Relief, by contrast, was abolished in 2024. Every lever has conditions: verify with a qualified tax adviser.
Download the complete guide
The full UK Property Tax Guide 2026 covers all seven taxes with current rate tables, planning notes for individual and corporate buyers, and the three structural shifts that have changed the calculus in the last two years. Available to Performa members: leave your email and it is yours, with no obligation attached.
This page is informational analysis, not tax advice. Rates are sourced from Performa Capital Research (UK Property Tax Guide 2026) and HMRC. Verify with a qualified tax adviser before any transaction. Updated July 2026.