Non-Resident Landlords

How should non-residents hold UK property?

Answered by Jordan Onraet-Wells, Founder & Chartered Tax Adviser (CTA). Published 9 August 2026. Last reviewed 9 August 2026.

The short answer

For most non-residents holding one or a few properties, direct personal ownership is the simplest and often the most tax-efficient route. A company can suit heavily let portfolios because profits are taxed at corporation tax rates, but it brings the ATED annual charge on dwellings over £500,000, a possible flat 17% SDLT rate on corporate purchases over £500,000, and no CGT annual exemption. Trusts help with succession but carry their own inheritance tax regime and are rarely a tax saving on their own. Whatever the wrapper, UK property stays in the UK tax net at purchase, letting, sale and death.

Personal ownership keeps access to the CGT annual exempt amount and, for many non-residents, the personal allowance, with residential CGT at 18% or 24% and no ATED.
Company ownership taxes rental profits at corporation tax rates, which can suit heavily geared, heavily let portfolios, but triggers ATED from £4,600 a year on dwellings over £500,000 and a possible 17% flat SDLT rate on purchase.
Extracting cash or the property from a company later is a second taxable event, so the same profit can effectively be taxed twice on the way out.
Trusts are useful for succession and asset protection but carry entry, ten-year and exit IHT charges of their own.
Enveloping no longer reliably shelters UK residential property from inheritance tax, and de-enveloping can itself trigger SDLT and a CGT charge, so unwinding needs careful sequencing.

The four charges no structure escapes

UK property is UK-situated, so the UK taxes it by reference to where the asset is, not where the owner lives. A non-resident meets Stamp Duty Land Tax on purchase, usually with the 2% non-resident surcharge stacking on the 5% additional-dwelling surcharge, income tax on rental profit collected through the Non-Resident Landlord Scheme, non-resident CGT reported and paid within 60 days of completion, and inheritance tax on death, because UK-situated assets are always within the UK IHT net. The structure question is therefore not how to escape these charges but which mix of them costs least for your facts. Our complete guide to non-residents holding UK property walks the whole lifecycle.

Personal versus company versus trust

Personal ownership is simplest: you keep the CGT annual exempt amount, many non-residents (including UK and EEA nationals and those entitled under a treaty) can claim the personal allowance against rental income, and there is no ATED. The trade-offs are the mortgage interest restriction, relieved only as a 20% basic-rate tax reducer, and the property sitting in your estate for IHT. A company deducts interest in full and pays corporation tax rates on profits, but faces ATED on dwellings over £500,000, a possible 17% flat SDLT rate on purchase unless a relief applies, no CGT annual exemption, and a second layer of tax when cash is extracted. Trusts carry their own IHT regime with entry, ten-year and exit charges, so they are a succession tool rather than a tax saving.

The enveloping trap

The classic pitfall is property moved into a company years ago for old non-dom IHT reasons. The IHT shelter for enveloped residential property has largely gone, so the structure now often costs more to hold, through ATED and compliance, than it saves. Unwinding it, de-enveloping, can itself trigger SDLT and a CGT charge in the company, so it needs careful sequencing rather than a quick transfer. The right answer depends on the property's use, financing, your residence and your estate plans, and the decision should be modelled across purchase, ownership and sale before you commit. Horizon runs exactly this modelling on fixed fees agreed upfront; book a free clarity call at /book to talk it through.

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Sources and further reading

This is general information for the 2026/27 UK tax year, not personal tax advice; speak to a Chartered Tax Adviser about your own position.

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