What’s changing from April 2026
As announced in Budget 2025, UK tax law will enact several changes affecting non-resident investors:
- Non-resident capital gains: rules for non-resident capital gains to be amended, including their treatment under the definition of property-rich entity and other administrative clarifications. Effective from 1 April 2026 for companies, and 6 April 2026 for individuals. (gov.uk)
- Non-resident dividend tax credit: abolished via legislation to take effect on 6 April 2026. (gov.uk)
- Closing the post-departure trade profits loophole: individuals who temporarily leave UK residency will no longer avoid tax on dividend income from close companies while non-resident. Effective 6 April 2026. (assets.publishing.service.gov.uk)
Key implications for non-residents and planning
These changes can catch off-guard those who are non-UK residents with UK ties. Here’s what to mind and actions to consider:
| Scenario | Risk | Actionable advice |
|---|---|---|
| Individuals splitting residency or planning to reside outside UK temporarily | May lose favourable tax status or be taxed on dividends they used to exclude | Review timing of departure or return; consider whether being non-resident during certain tax periods changes liability |
| Companies or entities held via non-residents | Changes to the definition of property-rich entities could bring unexpected CGT liabilities | Perform portfolio review: assess which entities are property-rich; if needed restructure holdings ahead of effective dates |
| Historic asset acquisitions (prior to 6 April 2025) | Different rules may apply, e.g. for rebasing of CGT basis | Evaluate if rebasing elections are available; gather valuation documents and legal advice |
Example scenarios
Scenario 1
Sarah, a UK citizen, earns dividend income via a UK close company. She plans to move abroad temporarily but return within 5 years. Under the new rules, the dividend tax credit is abolished, so her dividends will be taxed fully by the UK, even while she is non-resident. She should reconsider whether that move provides enough benefit to outweigh the increased UK tax.
Scenario 2
A US company owns UK property via a holding company that qualifies as a property-rich entity under new definitions. From 1 April 2026, gains triggered by disposal may be subjected to higher CGT for the company. The owner should assess whether to reorganise the holding or sell before the deadline.
Steps to prepare now
- Conduct a tax residency audit: Confirm if becoming or being non-resident affects your status, and whether you’ll be subject to UK rules on domicile or foreign income and gains.
- Review your investment structures: Are your companies or partnerships likely to be caught by “property-rich entity” rules? Restructure where possible ahead of deadlines.
- Collect documentation now: Historic acquisition prices, valuations, legal paperwork can be hard to obtain later.
- Use transitional reliefs or elections: In some instances you can rebase or elect for temporary treatment—for example for those who were non-resident prior to 6 April 2025. (gov.uk)
- Engage professional advice: Cross-border tax is tricky, with substantial penalties for non-compliance. Get tailored guidance.
Why the changes?
These reforms aim to level the playing field, closing perceived loopholes in non-resident treatment and dividend credits. They’re part of broader Budget 2025 proposals targeting tax fairness and closing the tax gap. (gov.uk)