Since 1 April 2021 there has been an extra 2 percentage points of stamp duty on residential purchases in England and Northern Ireland by non-UK residents. It sits on top of everything else, including the 5% additional dwellings surcharge, so a non-resident investor can find themselves paying 7 points more than the person who viewed the flat before them.
The part that catches people is the residence test. It is not the Statutory Residence Test you use for income tax, it is a separate and much blunter rule written specifically for stamp duty, and plenty of people who consider themselves thoroughly British fail it. Here is how it works, and how to get the money back if you pass the test later.
Who counts as non-UK resident
For stamp duty purposes an individual is non-UK resident in relation to a transaction if they were not present in the UK for at least 183 days during the 12 months ending with the effective date of the purchase. Presence is counted crudely: you are present on a day if you are in the UK at the end of it, anywhere in the UK.
That is the whole test for an individual. Not your domicile, not your nationality, not where your family lives, not whether you pay UK tax. Just days on the ground in the year before completion.
What the surcharge costs
Two percentage points go onto every band, including the band that would otherwise be zero. Because the surcharge applies to the whole price rather than a slice of it, the arithmetic shortcut is simple: work out the ordinary bill, then add 2% of the purchase price.
| Portion of price | UK resident, single home | Non-UK resident, single home |
|---|---|---|
| Up to £125,000 | 0% | 2% |
| £125,001 to £250,000 | 2% | 4% |
| £250,001 to £925,000 | 5% | 7% |
| £925,001 to £1,500,000 | 10% | 12% |
| Over £1,500,000 | 12% | 14% |
Worked Examples at £400,000
| Buyer | Stamp duty on £400,000 |
|---|---|
| UK resident, only property | £10,000 |
| Non-UK resident, only property | £18,000 |
| UK resident, additional property | £30,000 |
| Non-UK resident, additional property | £38,000 |
| Non-UK resident first-time buyer | £13,000 |
The first-time buyer line is worth pausing on. Being non-resident does not stop you claiming first-time buyer relief if you otherwise qualify, but the 2 points still go on top. So the rates become 2% up to £300,000 and 7% on the slice from £300,001 to £500,000, giving £6,000 plus £7,000 on a £400,000 purchase.
At the extreme end, a company caught by both the 17% flat rate for corporate purchases above £500,000 and the non-resident surcharge pays 19% of the whole price.
Buying Jointly
This is where the rules stop being intuitive. For joint buyers who are not married or in a civil partnership, if any one of you is non-UK resident then all of you are treated as non-UK resident for the transaction. One person's travel history sets the rate for everybody.
Spouses and civil partners get the opposite treatment, and it is generous. If you buy together, are not separated, and neither of you is acting as a trustee, then if one of you is UK resident you are both treated as UK resident. A returning expat buying with a partner who never left is fine.
Companies, trusts and close company control
A company is non-UK resident for these purposes if it is not UK resident for corporation tax at the effective date. That much is straightforward.
Less straightforward: a UK resident company can still be treated as non-resident for the surcharge if it is a close company that meets the non-UK control test and is not otherwise excluded. In plain terms, a British company controlled by non-resident participators does not escape the charge by being British on paper.
Crown Employment
There is a targeted exception for Crown employment. Someone in Crown employment, such as a diplomat, a civil servant posted overseas or a member of the armed forces serving abroad, is treated as present in the UK on a day when they are outside the UK for the purposes of that employment. It has to be claimed on the return rather than applied automatically, so it needs flagging to your conveyancer early.
What the surcharge does not apply to
- Non-residential and mixed-use property. The surcharge is residential only, so a mixed-use purchase escapes it entirely.
- Leases of seven years or less at the date of grant.
- Purchases below the thresholds: for a lease, the surcharge only comes into play where the premium is £40,000 or more, or the relevant rent is £1,000 or more.
- Scotland and Wales. Neither the LBTT nor the LTT rate tables contain a non-resident surcharge. An overseas buyer in Edinburgh or Swansea pays the same headline rates as a local buyer, though Scotland's Additional Dwelling Supplement and Wales's higher rates still apply to second properties.
How to claim the 2% back
This is the part worth knowing before you complete, because a lot of people qualify for a refund and never ask for it.
If you were non-resident on the day you bought but you then spend enough time in the UK, you can amend the return and get the 2% back. The condition is that you are present in the UK for at least 183 days during any continuous 365-day period that begins 364 days before the effective date of the transaction and ends 365 days after it. In other words, the qualifying year can straddle the purchase in either direction: days you spent here before completion count, and so do days after.
The claim is made by amending the SDLT return, and it must be made within two years of the effective date of the transaction.
If you are buying soon after arriving
The surcharge is genuinely reclaimable, but the money still has to be found on completion day, and 2% of a London purchase is not a rounding error. Budget for it as a real cost and treat the refund as a later bonus, rather than assuming your solicitor can defer it. They cannot: the return is due within 14 days of completion and the tax is due with it.
If your timing is flexible, and you are within sight of the 183 days, delaying completion by a few weeks can remove the charge at source and save the entire round trip. That is a conversation to have with your conveyancer before you exchange, not after.
Our stamp duty calculator covers the standard and higher rates for England and Northern Ireland. For a non-resident purchase, add 2% of the purchase price to the figure it gives you.