Non-resident individuals – Understanding the changes to overseas investors’ CGT compliance
Andy Noton, 30 October 2025
Andy Noton, 30 October 2025
The UK has long been a magnet for overseas capital, particularly in commercial and residential property investment. However, with the abolition of the long-standing non-dom regime announced in the 2024 Spring Budget, the rules for international investors are entering a period of major transition.
For those holding UK property, the implications for Capital Gains Tax (CGT) and wider compliance are significant and it is important that investors understand how they may be taxed in future.
Since 6 April 2025, the familiar “non-domiciled” status has been scrapped. In its place, the Government has introduced a new, simpler residence-based system.
The new foreign income and gains (FIG) regime applies to individuals coming to the UK who have been non-UK resident for at least 10 consecutive tax years, with the regime applying for their first four tax years of UK residence.
For qualifying individuals, it provides 100 per cent relief from UK tax on certain categories of foreign income and gains, broadly those previously covered by the remittance basis, arising in the first four years of UK residence.
After the initial four-year qualifying period ends, individuals fall back onto the standard UK rules and will be taxed on their worldwide income and gains on the arising basis.
There is no fee to access the FIG regime, but it does not apply automatically, so individuals must actively claim it on their UK tax return within 12 months of the 31 January filing deadline following the end of the relevant tax year.
Any claim must specify the amount of FIG for which relief is sought, with those figures included in the tax return.
A claim can cover income, gains or both and individuals may choose which sources of FIG to include.
Under this new regime, non-residents continue to be taxed on UK property gains, but the removal of the non-dom framework changes how overseas income and gains are treated for longer-term UK residents and may alter the tax profile of certain structures used to hold UK property.
For many overseas investors, the loss of the remittance basis, which previously allowed non-doms to keep foreign income and gains outside UK tax if not brought into the country is a game changer.
Investors who have become resident in the UK but still hold property through offshore entities have had to reassess their global property portfolio’s arrangements and how it generates income.
Even before the non-dom rules were abolished, non-resident individuals had been brought firmly into the CGT net.
Since 2015, disposals of UK residential property by non-residents have been taxable. In 2019, the scope widened to cover all UK land and property (residential and commercial), as well as indirect disposals of property-rich entities (companies where at least 75 per cent of the value is derived from UK property).
Since April 2020, every disposal of UK property by a non-resident must be reported to HMRC within 60 days of completion, with tax paid at the same time.
Missing the deadline results in penalties and interest applying, regardless of whether you are in UK self-assessment.
The combined effect of the wider CGT rules and the abolition of non-dom status means that compliance is becoming more complex than before and overseas investors should:
The UK remains attractive for international capital, but the rules are tightening. With the non-dom regime ending in 2025 and HMRC stepping up scrutiny of property transactions, now is the time for non-resident individuals to review their positions.
If you are looking to invest in UK property or already have a portfolio here, tailored advice is essential to avoid unexpected liabilities. Speak to our Property Partner Andy Noton (andrewnoton@lubbockfine.co.uk) or Tax Partner David Portman (davidportman@lubbockfine.co.uk) for expert advice on issues related to your global property investment.
