Non-Resident Capital Gains Tax on UK Property and the 60-Day Rule

Almost all content written for international investors covers the buying side. Yet an investment's real return is determined at the exit — and it is precisely there that a tax regime catches most foreign owners unprepared. This guide explains the capital gains tax (CGT) you will face when selling your UK property, the vital 60-day deadline, and the "rebasing" tool that can substantially cut the bill.

The Dangerous Misconception: "I'm Abroad, So I Sell Tax-Free"

This is the most expensive mistake made by property owners living abroad. The truth is: a property located in the UK is caught by the UK tax net, regardless of where its owner lives.

The history is clear: from 6 April 2015, non-residents have been liable to capital gains tax (Non-Resident Capital Gains Tax — NRCGT) on disposals of UK residential property. From 6 April 2019, the scope was widened to include all UK land and property (including commercial property). So today, every UK property you sell as a foreigner falls within this regime.

What is more, the escape routes have been closed: avoiding the tax by holding the property in a company and selling the company's shares instead of the property is no longer possible. Under the "indirect disposal" rules, if you hold 25% or more in a company that derives 75% or more of its value from UK land, your share sale is also caught.

The Rates and the Calculation

Non-residents are subject to the same rates as UK residents:

The gain is calculated roughly as: sale proceeds − acquisition cost (or the rebased value) − allowable costs. The costs you can deduct include capital improvements (note: NOT routine repairs and maintenance) and selling costs (estate agent commission, legal fees).

A critical and little-known warning: the gain is calculated in sterling. Even if you financed the property in your own currency, HMRC uses the exchange rates at the dates of purchase and sale. So if sterling has strengthened against your currency, a taxable gain in sterling terms can arise even if you made no profit in your own currency. This is what surprises foreign sellers most.

The Most Valuable Tool: Rebasing

Here is the rule that can substantially cut your bill. As a non-resident, you can calculate your gain not from the original price you paid but from the property's market value on 5 April 2015 (for commercial property and land, the date is 5 April 2019). This is called "rebasing" and it is the default method.

Why does it matter so much? A concrete example: a property you bought in 2010 for £150,000 was worth £220,000 on 5 April 2015, and you are selling it today for £300,000.

Your taxable gain is almost halved. So on properties bought before 2015 that had appreciated by that date, rebasing can save tens of thousands of pounds.

A few important details: there are actually three calculation methods (rebasing, time apportionment and original cost), and you can choose whichever gives you the best result; the election is made on your CGT return. You also do not need to have had a valuation in 2015 — you can obtain a retrospective professional valuation at the time of sale (records of the property's condition at that date strengthen the valuation). If you use rebasing, you can only deduct improvements made after 5 April 2015.

The 60-Day Rule: The Most Common Mistake

This is the rule foreign sellers trip over most often, and most expensively.

Within 60 days of completion (completion — not exchange of contracts!), you must file a return with HMRC and pay any tax due. This is done through HMRC's "Capital Gains Tax on UK property" account (via Government Gateway).

And here is the critical difference: for non-residents this rule is stricter than for UK residents. A non-resident must file even if they made no gain, or even a loss on the sale. Thinking "no tax arose, so there is nothing to report" is a serious mistake.

The penalties are automatic and they accumulate: £100 applies immediately on lateness, £300 at six months, another £300 at twelve months, and then daily penalties are added; interest also runs on unpaid tax. These penalties apply even if no tax is due at all, and HMRC rarely accepts "I did not know the rules" as an excuse.

Other Critical Points

Double taxation. Paying CGT in the UK does not mean you will not be taxed in your own country too. If your country also taxes this gain, and there is a double taxation treaty between the two countries, you can usually offset the UK tax you paid. This must be planned with an adviser in both countries.

Private Residence Relief (PRR). If you lived in the property yourself for a period, you may claim relief for the gain attributable to that period. The rules are complex and there are additional conditions for non-residents.

The temporary non-residence trap. If you leave the UK, sell the property, and then return to the UK within five years, extra tax can arise in some circumstances. If you plan to return to the UK, plan the timing of your sale with an adviser.

If you hold it through a company. Non-resident companies pay Corporation Tax, not CGT (from April 2019). This is a difference that affects the choice of structure.

Optivest Note: This is a stage discussed far less than the buying side, but it directly determines your return. Let us draw the boundary clearly: Optivest is not a tax adviser and does not prepare your CGT calculation, your rebasing election or your return — that is the job of a qualified UK tax adviser, and you should not enter this area without professional support. Optivest's contribution is at two points: our legal support (conveyancing) service runs the legal side of the sale, and your solicitor ensures the 60-day reporting duty is on your agenda; our property management service helps ensure costs and improvements are properly documented while you hold the property — and those records are exactly what you need to reduce your taxable gain at the point of sale. A practical tip: speak to your tax adviser the moment you start thinking about selling, not afterwards.

Important notice — not tax advice: This article is for general information only and does not constitute tax advice. The examples here are simplified; your actual liability varies greatly with your residence history, ownership structure, how you used the property and the tax treaties with your country. Rates, exempt amounts and rules can change. Before selling a UK property, consult a qualified UK tax adviser and confirm on gov.uk; missing the 60-day deadline triggers automatic penalties. Optivest does not provide tax advisory services.

Frequently Asked Questions

I live abroad — do I still pay CGT?

Yes. Not living in the UK does not exempt you from UK capital gains tax. Non-residents have been liable to CGT on disposals of UK residential property since 6 April 2015 (and on all UK property since 2019). The rates are the same as for UK residents: 18% / 24%.

Must I file even if I made no gain?

Yes — and this is the most common mistake. Non-residents must file within 60 days even if they made no gain, or even a loss on the sale. This is a stricter rule than for UK residents, and failing it triggers automatic penalties (starting at £100).

What is "rebasing", and does it cut my tax?

Rebasing lets you calculate your gain not from the original purchase price but from the property's market value on 5 April 2015 (2019 for commercial property). On a property bought before 2015 that had appreciated by then, it can cut the tax substantially — in our example, the taxable gain fell from £150,000 to £80,000.

When does the 60-day clock start?

From completion, not from exchange of contracts. Within those 60 days you must both file the return and pay the tax. The late penalties are automatic: £100 immediately, £300 at six months, another £300 at twelve months, plus daily penalties and interest.

Will I also pay tax in my own country?

That depends on your country's rules. If your country also taxes this gain, and there is a double taxation treaty between the two countries, you can usually offset the UK tax you paid. This must be planned with an adviser in both the UK and your own country.

In Summary, and How to Reach Us

An investment's real return is determined at the exit, and in the UK the exit is taxed. What you must know as a foreign seller: not living in the UK does not exempt you from CGT (18%/24%); you must report and pay within 60 days of the sale (even if there is no gain); the penalties are automatic; and on properties bought before 2015, rebasing can cut the tax substantially. Remember that the gain is calculated in sterling — so currency movements enter the tax calculation too.

This calculation and filing is the job of a qualified tax adviser; Optivest does not provide tax advice. But our legal support service runs the legal side of the sale, and our property management service keeps your cost and improvement records in order. Contact us or reach us on WhatsApp. See our legal support service, our property management service, and our NRL Scheme guide for rental income tax.