Owning UK property while living abroad: tax, selling and mortgages

Keeping a UK home when you move abroad is common. It might be your family house, a flat you plan to return to, or an investment you bought before you left. The tax position changes in three main places once you are non resident: the rent you receive, the gain you make when you sell, and the inheritance tax on the property. There are also rules on buying more, borrowing and keeping the right tax status. This guide covers each in turn.

Renting it out: income tax and the non resident landlord scheme

UK rent is UK source income, so it is taxable in the UK whether or not you live here. You are treated as a non resident landlord for the purposes of the scheme if you live abroad for six months or more a year, even if you are UK resident for tax purposes.

How the tax is collected

• Tax deducted at source. By default, your letting agent or tenant deducts basic rate tax from the rent after allowing for expenses the agent has paid, and sends it to HMRC. You receive a yearly certificate. If you have no agent and the tenant pays you more than £100 a week, the tenant has to deduct the tax.
• Paid in full. You can apply to HMRC (individuals use form NRL1i) to have rent paid without deduction. HMRC can refuse if your tax affairs are not up to date. Companies use NRL2i and trusts use NRL3i.
• Self Assessment. Either way, you normally need to file a tax return declaring the income. Non residents cannot use HMRC's online filing for this: you post a paper return with the residence pages (SA109) and the UK property pages (SA105), use commercial software that supports SA109, or use an adviser. The paper deadline is 31 October after the tax year, earlier than the online deadline.

What is taxed

• Profit. Rent minus allowable running costs such as agent fees, repairs, insurance and ground rent.
• Mortgage interest. It is not deducted from profit. Instead you get a basic rate tax credit (20% of the interest, subject to limits).
• Personal Allowance. British citizens and EEA citizens can claim the £12,570 allowance as non residents, and so can some others under treaties. You claim it after the year end using form R43 or on the return. If you are not eligible, all income is taxed from the first pound.
• Rates. For 2026/27, 20%, 40% and 45% apply. The Budget announced separate property income rates of 22%, 42% and 47% from April 2027 in England, Wales and Northern Ireland.
• Making Tax Digital. Landlords with qualifying income above £50,000 are due to join from 6 April 2026, with lower thresholds later. Check whether it applies to you as a non resident.

Worked example (illustrative). A British citizen who lives abroad and has no other UK income rents out a flat.

• Rent for the year is £30,000. The agent charges and other allowable costs total £4,000. Mortgage interest is £10,000.
• Taxable profit is £26,000. Assume the Personal Allowance of £12,570 is available, leaving £13,430 to tax at 20%, which is £2,686.
• The finance cost credit is 20% of the lowest of the interest (£10,000), the profit (£26,000) and the income above the allowance (£13,430). That is £2,000.
• Tax due is £686.

If the agent paid the £4,000 of costs and deducted basic rate tax from the remaining £26,000, that would be £5,200, and the difference of £4,514 would only come back as a refund after the return is filed. For a landlord with a large mortgage, applying for payment in full usually improves cash flow, provided the return is filed on time every year.

Selling: the 60 day rule for capital gains tax

Non residents are charged capital gains tax (CGT) on gains from UK property and land, including residential, commercial and mixed use property. Gains on most other UK assets, such as shares, are generally not taxed for non residents, subject to the temporary non residence rules if you return within five years.

• Report and pay within 60 days. For completion dates from 27 October 2021, you must report the disposal to HMRC and pay any tax within 60 days. Interest and penalties apply to late reports or payments.
• Report even if nothing is due. Non residents must report a disposal of UK property even where there is no tax, a loss, or you already file a return.
• How. Use HMRC's online service for CGT on UK property, which gives you a reference to pay, or submit the form by post. An agent can act for you once you set up access.
• Rates and allowance. For 2026/27, rates are 18% on gains within the basic rate band and 24% above it, and the annual exempt amount is £3,000.
• Gain. Sale price less what you paid and allowable costs for buying, selling and improving. For property you acquired before April 2015, special base cost rules apply, so keep valuation evidence.

Worked example (illustrative). You bought a flat in 2018 for £250,000, paying £7,500 of buying costs. You sell in 2026/27 for £340,000 with £5,000 of selling costs.

• Gain: £340,000 less £250,000 less £7,500 less £5,000 is £77,500. After the £3,000 exempt amount, £74,500 is taxable.
• Assume your other UK taxable income is £20,000 after allowances, leaving £17,700 of the £37,700 basic rate band.
• Tax: £17,700 at 18% is £3,186 and £56,800 at 24% is £13,632. The total is £16,818, due within 60 days of completion.

Does main residence relief help?

If the property was your main home, private residence relief can remove some or all of the gain. For non residents, the rules are tighter. Since 6 April 2015, a tax year does not count as one in which you occupied the home as a residence if the home is in a territory where neither you nor your spouse or civil partner is tax resident, unless you stay there at least 90 nights in the year (reduced proportionately for part years). Relief also covers a final period of ownership, which is understood to be nine months at present, but confirm the current period. If you let the property for most of the time you have been abroad, the relief is often reduced to a fraction. Do the calculation before you sell, not afterwards.

Inheritance tax on UK property

UK property is always within UK inheritance tax (IHT), even if you are not UK resident and even if you live in a country with no inheritance tax. The standard rate is 40% above the nil rate band of £325,000. A residence nil rate band of up to £175,000 may apply if a home passes to direct descendants, and both amounts are currently frozen until April 2031. Transfers between spouses are normally exempt, with limits where the person giving is a long term UK resident and the spouse receiving is not.

• Debt. Borrowing secured on the property is generally deducted from its value for IHT purposes, subject to anti avoidance rules. Do not take on debt just to reduce the tax.
• Offshore companies. Holding UK residential property through an overseas company does not take it out of UK IHT. The rules treat the shares as UK property.
• Your other assets. Since 6 April 2025, someone who was UK resident for at least 10 of the previous 20 tax years is a long term resident, and their worldwide assets are in scope. The exposure continues after leaving for between three and ten years. See our article on UK inheritance tax after you leave the UK.
• Insurance and wills. A UK will, and sometimes a separate will where you live, can avoid delay. Life cover written in trust can fund the bill without a forced sale.

Buying, stamp duty and mortgages

Stamp duty land tax

If you buy a residential property in England or Northern Ireland while non resident for stamp duty purposes, a 2% surcharge applies on top of the standard rates. The standard rates are 0% to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million and 12% above. If the purchase leaves you owning more than one dwelling, a further 5% surcharge usually applies, with an exception when you replace your main home. Residence for this purpose is a separate test. Broadly you are UK resident for stamp duty if you are in the UK at least 183 days in a 12 month period around the purchase, though other windows apply for some buyers. If you become UK resident after the purchase, you may be able to amend the return within two years to remove the surcharge. Scotland and Wales have different taxes, so check them separately.

Mortgages for expats

• Many mainstream lenders restrict or refuse lending to borrowers who live abroad. Specialist expat mortgage lenders exist, often with higher rates, larger deposits and stricter income checks.
• Lenders will usually ask about your country of residence, income currency, the type of tenancy and your right to rent the property. A residential mortgage often does not allow letting without consent, so a change to letting needs the lender's agreement.
• Income in a foreign currency can be reduced by the lender when assessing affordability.
• Currency risk is yours. If your income is in one currency and the mortgage is in sterling, an exchange rate move can raise the real cost.

How your residence status affects all of this

Whether you count as non resident is decided under the statutory residence test, each tax year. A UK home matters in that test: owning or having access to accommodation in the UK is one of the ties that can allow fewer days before you are treated as resident, and a UK home can trigger the home test if you use it for long enough. If you stay in your own UK property when you visit, those nights count as days and the accommodation tie counts too.

• Track your UK days every year and keep evidence of travel.
• If you let the property to others, check that you are not still holding it as available accommodation for your own use.
• If you plan to return, remember that the temporary non residence rules and the inheritance tax look back both depend on your history.
• If you are UK resident when you sell, the 60 day return can still apply where tax is due, but reporting, reliefs and rates can differ, so confirm your status for the year of sale.

A practical checklist

1. Confirm your residence status for each tax year and keep a day count.
2. Decide whether to receive rent gross, and apply using the right NRL form well before you let.
3. Register for UK Self Assessment as a non resident and diarise 31 October for paper returns.
4. Claim your Personal Allowance if you are eligible, using form R43 or the return.
5. Keep records of purchase price, improvements, valuations and costs.
6. Check consent to let with your lender and your insurance cover for letting.
7. Consider landlord duties: gas and electrical safety, deposit protection and licensing, many of which apply whether or not you live nearby.
8. Appoint a UK agent or trusted contact who can act quickly in an emergency.
9. Review your UK will and the IHT position at least every few years.
10. Before selling, work out the gain and set the 60 day deadline in your diary on the day the sale completes.

Common mistakes

• Assuming rent from a UK flat is tax free because you live in a country with no income tax.
• Missing the 60 day CGT report because tax is also on the return.
• Skipping the report on a sale because the gain looks small or there is a loss.
• Assuming main residence relief still covers the full gain after years abroad.
• Letting the property without lender consent.
• Forgetting that mortgage interest is not deducted from profit.
• Holding UK property in an overseas company believing it takes it outside IHT.
• Treating the purchase surcharge or mortgage affordability as an afterthought.

Questions to ask

1. Should I receive my rent gross, and what are the conditions?
2. Can I claim the Personal Allowance as a non resident?
3. If I sell this year, what will my gain be and who files the 60 day report?
4. How much main residence relief could I keep?
5. What is the IHT position on the property and on my other assets given my residence history?
6. If I buy another property, what is the stamp duty and what mortgage options exist for me?
7. What happens to all of this if I return to the UK?

What to do next

• Gather the purchase documents, mortgage statement, tenancy agreement and agent statements.
• Check whether your agent is deducting tax and whether you have a certificate.
• Count your UK days for this tax year.
• Estimate the gain on a sale so that you know the cash needed within 60 days.
• Speak to a tax adviser who deals with non resident landlords before you let, sell or buy.

Tax, 10 minute read. Last reviewed October 2026. Applies to: UK rules. General information, not personal advice.