Property & British Expats

Introduction

Many British expats retain UK property and/or buy property overseas. Unlike many investments, property is immovable and heavily regulated locally. That means it can create tax liabilities and filing obligations in more than one jurisdiction.

For UK purposes, property is also one of several factors that can indicate ongoing UK connections. Where the automatic SRT tests do not determine residence, UK ties (including accommodation) and day counts can become decisive.

Importantly, HMRC does not apply a single ‘centre of life’ test in the way some countries do; instead the UK relies on the SRT’s statutory framework. In practice, however, a home that is available to you, patterns of UK visits, and family/work ties can materially affect outcomes.

Why Property Commonly Creates Cross-Border Tax Complexity

Property is frequently misunderstood cross-border because:

1. It is immovable and taxed where it sits (often with local filings and transaction taxes).
2. It can produce recurring income (rent) that is treated differently across jurisdictions.
3. Disposals can trigger reporting and payment deadlines that are easy to miss.
4. UK accommodation availability can be relevant to SRT tie analysis.
5. Inheritance and estate rules differ significantly between countries, and the UK’s post-6 April 2025 IHT framework increases the need for clarity on status.

A practical theme runs through all of this:

Property does not just create tax when you sell.
It can create tax and compliance while you hold it, rent it, finance it, change ownership, or move countries.

UK Property: Core Rules Expats Should Understand

Whether you live in Dubai, Singapore, Spain, Portugal, Australia, Hong Kong, or elsewhere, the UK property rules remain broadly consistent. Your residence position affects how you are taxed, but UK property stays UK property.

Rule 1 - UK rental income is UK-source and generally within UK income tax

UK rental profits are generally taxable in the UK as UK-source income. If you are tax-resident elsewhere, that country may also tax the same income. Double tax relief is often achieved via foreign tax credit, depending on the treaty and local law, rather than a blanket exemption. The practical point is that UK property income commonly brings UK compliance mechanics even where you live abroad.

Rule 2 - The Non-Resident Landlord Scheme (NRL Scheme) can apply where your usual place of abode is outside the UK

Without approval to receive rent gross, a letting agent (or, in some cases, the tenant) may have to withhold tax at the basic rate from rent and pay it to HMRC. A key nuance: the NRL Scheme test is based on your usual place of abode being outside the UK, which can differ from your SRT residence outcome in certain cases.

‍Rule 3 - UK returns: many non-resident landlords will need Self Assessment, but requirements are fact-specific

Whether you must file depends on your circumstances and whether HMRC issues a notice to file. Many non-resident landlords do file to finalise liability, reconcile any withholding, and claim allowable expenses/reliefs where applicable. A common misconception is that withholding under the NRL Scheme is always “the final answer”. Often it is not.

Rule 4 - Non-residents can be within UK tax on disposals of UK land (and reporting can apply even if no tax is due)

Since 6 April 2020, non-UK residents generally must report disposals of UK land, even if no UK CGT is payable (for example, due to losses or exemptions). Different regimes can apply depending on whether the owner is an individual, company, trustee, or widely held vehicle. Identifying who owns the asset for tax purposes matters.

Rule 5 - Reporting and payment deadlines can be strict

Non-residents disposing of UK land generally report through the UK property disposal reporting service within 60 days of completion, with payment due by the same deadline where tax is payable. In practice, people often anchor to exchange. For these rules, completion is usually the date that drives the clock.

Rule 6 - Section 24 interest restriction applies to individuals, including many expat landlords

For individual landlords, mortgage interest is generally relieved via a basic-rate tax reduction rather than a full deduction. This can affect effective tax rates, especially where rental income pushes someone into higher-rate bands or where interest costs are high relative to rent.

Rule 7 - SDLT: the 2% non-resident surcharge can apply to purchases of residential property in England and Northern Ireland

The SDLT residence test is separate from the SRT and is based on UK presence rules. Where it applies, it generally applies to the whole transaction consideration. The surcharge can also apply where any purchaser in a joint purchase is non-resident for SDLT purposes. There is also a repayment mechanism if the relevant UK presence condition is met within the permitted timeframe. Whether that is realistic depends on future travel and life plans.

Rule 8 - UK IHT: UK property is a UK-situated asset; wider exposure depends on status

UK land and buildings are generally within UK IHT as UK-situated assets. Whether overseas assets are within UK IHT depends on the post-6 April 2025 IHT framework for internationally mobile individuals and other IHT provisions. Spousal exemptions, nil-rate bands and reliefs also matter, so the headline rate is rarely the full story.

Overseas Property: Common Tax Touchpoints

Expats buy overseas property for:

• lifestyle
• retirement plans
• a holiday base
• rental income
• diversification
• family reasons

But overseas property brings its own layers of complexity and additional compliance.

You may owe tax where the property is located

• Rent is typically taxed locally and often requires local filings
• Disposals are commonly taxed locally (CGT or equivalent)
• Transaction taxes can apply on purchase and sale
• Some countries levy wealth/real-estate taxes (for example, France has a real-estate wealth tax; Spain has wealth tax subject to national/regional rules)
• Landlord regulation, registrations and withholding can apply to non-residents

You may also face UK tax in parallel in some scenarios

This is most likely where:

• you are UK-resident in the relevant year
• you return to the UK and your residence position changes during the year
• a structure (company/trust) changes how the UK taxes the income or gain
• the timing of sale and return creates overlapping tax years across countries

Double tax treaties reduce double taxation but do not remove complexity

Treaties typically allocate taxing rights and provide a mechanism to mitigate double taxation, often via foreign tax credit.

They rarely remove compliance obligations, and they do not prevent countries from applying their domestic definitions, computational rules, and filing requirements.

Moving country can change outcomes

Tax outcomes often change around:

• sale timing
• local residence tests
• the year you (re)enter UK tax residence
• how local rules treat non-resident owners
• whether a spouse/partner’s status differs from yours

Overseas property and IHT now needs a post-6 April 2025 lens

From 6 April 2025, changes to the UK IHT framework for internationally mobile individuals can bring overseas assets into scope in some circumstances where conditions are met (often described as a “10 out of 20 years” test, with a potential “tail” after leaving).

This is another reason overseas property now needs to be considered not only for income and CGT, but also for estate exposure.

Residency & Property: Why Accommodation Matters

A UK home can make you UK resident again under the SRT in some cases, particularly where the sufficient ties test applies.

Accommodation tie

An accommodation tie can arise where UK accommodation is available for a continuous 91-day period and the individual uses it. HMRC guidance indicates that even “casual use” can be sufficient in relevant cases. The detailed conditions depend on the legislation and the facts.

In practice, issues often arise where:

• a UK home is kept available “just in case”
• family use makes it feel like a continuing base
• visits become longer or more frequent over time
• the property is available even if rarely used

Work tie

A work tie can arise where you work in the UK for 3 hours or more on a sufficient number of days in the tax year (commonly summarised as 40 days, subject to the detailed conditions).

Family tie

If your spouse or minor children live in the UK.

Country tie

If you spend more days in the UK than in any other single country (relevant in specific leaver scenarios).

90-day tie

If you spent 90+ days in the UK in either of the two prior tax years.

Combine ties

Under the sufficient ties test, relatively low UK day counts can still lead to UK residence depending on whether you are an arriver or leaver and how many UK ties apply.

Property is often the trigger that impacts residency planning because it affects both day-count behaviour and tie analysis. The risk is rarely one single trip - it is the combination of availability, use, and pattern over the year.

Selling UK Property as an Expat: Timing Still Matters

Selling UK property while abroad is mainly a question of:

1. UK land disposal reporting requirements
2. whether you are UK-resident in the year of disposal

For non-UK residents, disposals of UK land are generally reportable within the 60-day window from completion, even where no UK CGT is due.

For UK residents, UK CGT can apply to gains on UK and overseas assets (subject to reliefs, exemptions and any applicable double tax relief).

Residence status in the disposal year can therefore materially change the UK analysis.

A common pattern is that someone plans a sale while abroad, but then UK presence increases in the same year:

• visits become longer
• a return happens earlier than expected
• a spouse returns first
• children return for schooling
• a UK home remains available and gets used

In those cases, the issue is not that the rules “change”. It is that the taxpayer’s status for that year may have changed.

Selling Overseas Property as a British Expat

Overseas property interacts with UK tax in complicated ways, mainly because two countries may tax the same disposal.

• The country where the property is located commonly taxes the gain
• The UK may also tax the gain if you are UK-resident in that tax year
• Double tax relief is often via credit, but computational differences can mean the credit does not always eliminate the entire liability in the other country.

Why credits do not always “wipe out” the bill:

• different cost base rules
• different reliefs and exemptions
• different timing rules
• different treatment of expenses and improvements
• different categorisation of the return (income vs gain)

Many countries classify property returns differently. That means the foreign tax credit position can be more complex than expected.

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UK IHT After 6 April 2025: Residence History and Overseas Assets (“10/20”)

From 6 April 2025, changes to the UK’s approach to IHT for internationally mobile individuals mean that residence history can be a more prominent factor in assessing when overseas assets may fall within scope. This is often summarised in commentary as a ‘10 out of 20’ style concept, but the detailed outcome depends on the legislation, transitional rules and the individual’s timeline.

What this changes in practice is that expats may need to consider IHT exposure by reference to UK residence history, not just current location.

Property is often central here because it tends to be:

• high value
• illiquid
• jointly owned
• held in structures (companies or trusts)
• difficult to move or “simplify” quickly

The rate of IHT, and how much is actually payable, depends on the wider estate, exemptions, nil-rate bands and reliefs. So the analysis is about exposure and structure, not just headline percentages.

Expat Case Studies

These are simplified examples for education. Actual outcomes depend on residence status, reliefs, valuations, elections and foreign tax credits.

Case Study 1 – The Dubai family who kept a UK home

A UK home is retained and remains available. UK visits increase and the family stays in the property. Depending on day counts and ties, UK residence status could change under the SRT, potentially widening UK tax exposure for that year.

Case Study 2 – The Spain retiree who sold at the wrong time

A Spanish property is sold close to a UK return. The timing creates a risk that the UK taxes the gain in the same year as Spain, and credit relief does not fully offset due to differences in computation.

Case Study 3 – The Singapore executive with a UK buy-to-let

NRL Scheme paperwork is not completed and withholding occurs at basic rate. Cash flow is affected and the UK compliance position still needs to be finalised.

Case Study 4 – The Portugal returner with unclear documentation

A foreign property is sold and funds move across accounts without clear records. When the individual returns, evidencing the nature of funds and the relevant tax treatment becomes more complex than expected.

Case Study 5 – The global nomad with a UK base

A UK property is used during visits and becomes a regular base. Day counts increase and ties accumulate. The individual assumes they remain non-resident, but the SRT analysis becomes finely balanced.

SDLT for Expats: The 2% Non-Resident Surcharge

One of the most common surprises for British expats buying residential property in England or Northern Ireland is the 2% SDLT non-resident surcharge.

Key points:

• You pay the surcharge if you are not UK-resident for SDLT purposes
• This is a different test from the SRT and is based on UK presence rules
• Citizenship is irrelevant
• If any purchaser in a joint purchase is non-resident, the surcharge can apply to the whole purchase
• It applies regardless of intent (“moving back soon” does not determine the outcome)
• It is separate from the 3% additional property surcharge
• There is a repayment mechanism if the relevant UK presence condition is met within the permitted timeframe, but this depends on future travel patterns

The practical takeaway is to model SDLT costs early and treat the surcharge as a real possibility if UK presence is limited.

Overseas Property: How Tax Works When You Buy Abroad as a British Expat

Buying abroad adds a second layer of complexity because countries differ on:

• purchase taxes
• wealth/real-estate taxes
• rental income rules
• landlord obligations
• CGT treatment
• inheritance and succession rules
• reporting obligations
• non-resident regimes

Country snapshots (high level):

Spain

• Wealth tax subject to national/regional rules
• CGT on disposals, with local computation rules
• Strict residency enforcement in practice
• Inheritance outcomes can vary by region and relationship
• Treaty relief exists, but local mechanics still matter

Portugal

• Local CGT rules apply to non-residents
• Flat-rate features can apply in some scenarios
• UK and Portuguese computation rules differ
• Sale timing around a UK return can change the UK overlay

France

• Real-estate wealth tax in relevant cases
• Social charges can apply to rental income and/or gains
• CGT computation and holding-period effects differ from the UK
• Treaty relief helps but does not remove local compliance

UAE / Dubai

• No federal personal income tax for individuals and no general CGT regime for individuals (local rules can still apply in specific cases)
• UK residents remain taxable in the UK on worldwide income/gains where within scope
• UK tax is generally not “retrospective” simply because someone later returns; timing and residence status drive outcomes

Cyprus

• Local taxation can apply to rental income
• CGT can apply on Cyprus-situated property
• Split-year treatment and UK residence timing can still matter on return

Singapore / Hong Kong

• Local taxation and filing requirements can apply to rental income
• Do not assume “no tax” locally
• The UK may also tax if you are UK-resident in the relevant year, with relief typically via treaty/credit where applicable.

Joint Ownership: A Common Cross-Border Complication for British Expats

Joint ownership often looks simple.

In practice, tax outcomes depend on ownership, documentation and residence status.

Rental income follows beneficial ownership (and spouse rules can differ)

Rental income is taxed based on beneficial ownership (who is entitled to the income and capital value), not simply whose name is on the mortgage.

For spouses and civil partners, the UK has default rules that often allocate income 50:50 unless specific conditions are met and evidenced.

Changing ownership proportions can trigger CGT and/or SDLT issues

Changing beneficial shares can be a disposal for CGT purposes. Transfers between spouses can be tax-neutral in some cases, but outcomes depend heavily on residence status and whether debt is involved.

Mixed-residency couples can face SDLT surcharge issues

For SDLT, if a purchase is joint and any purchaser is non-resident for SDLT purposes, the surcharge can apply to the whole transaction.

Staggered returns can change outcomes year-by-year

If spouses return to the UK in different tax years, residence status can diverge. That can affect:

• which person is taxed on rental profits
• the UK tax treatment of disposals
• whether split-year treatment applies
• how credits and exemptions operate

Inheritance treatment depends on status and structure

IHT outcomes for jointly owned property depend on multiple factors including status under the post-6 April 2025 framework, the situs of assets, and spousal exemption rules. This is an area where assumptions often fail.

Owning Property Through a Company: When It Helps and When It Adds Complexity

Expats sometimes buy property through:

• companies / SPVs
• offshore structures
• family investment companies
• trusts
• LLPs

This can be appropriate in some cases, but it changes the tax profile and increases compliance.

Potential reasons company ownership is considered:

• multiple properties and long-term reinvestment
• leverage and interest deductibility within the corporate regime
• administrative segregation of assets/liabilities

Whether a corporate structure is beneficial depends on the full facts, including financing costs, extraction strategy, local tax and administrative burden.

Common areas where complexity increases:

• extracting profits (dividends, salary, loans)
• different tax outcomes on sale compared to personal ownership
• additional reporting (including regimes that can apply to corporate-held residential property)
• offshore companies and management/control issues
• return-to-UK complications

Company ownership is not automatically “better”. It is a structural choice that trades one set of outcomes for another.

Trust-Owned Property: Why the Post- 6 April 2025 Landscape Matters

Historically, some expats used trusts for estate planning and IHT mitigation, particularly in the non-dom era.

The post-6 April 2025 framework changes how many families need to think about long-term residence history, and trust outcomes remain highly fact-specific.

Key points to understand:

• the settlor’s status and timeline
• whether assets are UK-situated or overseas
• income tax and CGT outcomes when benefits are received
• how UK anti-avoidance rules can apply
• the interaction between trust planning and future UK return intentions

Trust planning now requires careful, current analysis and should not be based on legacy assumptions.

Financing Property as an Expat: Hidden Cross-Border Issues

British expats often finance property with:

• UK mortgages
• foreign mortgages
• developer finance
• private lending

Financing affects more than cash flow.

Common considerations:

• for individuals, interest relief restrictions in the UK
• differences in local deductibility rules
• currency exposure and refinancing risks
• how cross-border movement of funds is documented
• whether refinancing creates complexity when returning to the UK.

Returning to the UK With Foreign Property: A High-Change Period

Returning to the UK can change the UK tax position quickly.

Common impact areas:

• overseas rental income may become relevant to UK tax once UK residence applies
• selling overseas property in the return year can create overlapping tax exposures
• foreign tax credit is often available but not always complete
• IHT exposure may change under the post-6 April 2025 IHT framework for internationally mobile individuals
• documentation becomes more important when multiple tax years and jurisdictions interact.

Moving Abroad With UK Property: Why Timing and Evidence Matter

Before leaving the UK, many expats gather and keep evidence on:

• moving dates and day counts
• when UK accommodation ceased to be available (if relevant)
• property valuations and capital expenditure records
• NRL Scheme status and letting arrangements
• mortgage and refinancing documentation
• how they intend to use the UK property while abroad

Leaving without clear records does not necessarily create tax, but it often makes later compliance harder.

The Most Common Property Mistakes British Expats Make

1. Missing UK land disposal reporting deadlines
2. Treating NRL Scheme withholding as “final tax” without checking the overall position
3. Underestimating SDLT non-resident surcharge exposure
4. Assuming treaties remove UK compliance obligations
5. Selling overseas property in a year UK residence applies, creating double tax complexity
6. Ignoring local landlord rules, filings or withholding regimes
7. Failing to consider the post-6 April 2025 IHT framework for overseas assets
8. Changing ownership/structure without considering CGT/SDLT/IHT interaction
9. Using companies “to save tax” without modelling profit extraction and sale outcomes
10. Using trusts based on outdated assumptions
11. Poor documentation when funds move across accounts and jurisdictions
12. Treating residence planning as a day-count exercise only (ignoring ties and accommodation).

The Expat Property Strategy: A Practical Framework

This is a practical educational checklist used to reduce surprises:

1. Clarify your residence position and keep day-count evidence
2. Map where income/gains are taxed locally versus in the UK
3. Identify UK reporting points and deadlines early
4. Review ownership structure (personal, joint, corporate, trust)
5. Consider IHT exposure under the post-6 April 2025 framework
6. Keep documentation that supports filings and relief claims
7. Model sale timing if you may return to the UK
8. Treat SDLT surcharge as a rule-based cost, not something intent changes
9. Avoid assumptions about “no tax” countries for local property compliance
10. Re-check the plan when life changes (marriage, children, return plans, new property).

Conclusion

Property can be emotionally reassuring - but cross-border outcomes depend on residence status, local law, UK rules, timelines and documentation.

Property isn’t the problem. Misunderstanding how multiple systems interact is. With the right clarity on residence, reporting, structure and timing, most issues become manageable and predictable.

 This article is provided for general informational purposes only. It does not constitute tax advice, legal advice, financial advice, or a recommendation to take (or refrain from taking) any action. Tax outcomes depend on individual circumstances, the precise facts, and the law and HMRC practice in force at the relevant time (including changes announced but not yet enacted). No reliance should be placed on this article as a substitute for obtaining personalised advice from a suitably qualified professional. No professional relationship is created by reading or relying on this content.