Non-resident CGT penalties start at £100 the day after a return is late and rise to at least £300 more after 6 months and again after 12 months. Interest runs on any tax paid late, late payment penalties of 5% can apply, and errors in the return can add penalties of up to 100% of the extra tax. Most of these penalties come from a handful of avoidable mistakes, such as not filing because no tax was due.
HMRC’s guidance on telling HMRC about CGT on UK property if you’re not a UK resident sets out the filing rules that the penalties enforce.
This guide explains the non-resident CGT penalties for late filing, late payment and errors, the most common ways people get it wrong, a worked example of how penalties add up, and what to do if you are already late.
Non-Resident CGT Penalties for Late Filing
A non-resident must file a return for every disposal of UK property or land within 60 days of completion. If it is late, HMRC can charge:
| How late | Penalty |
|---|---|
| 1 day | £100 |
| 6 months | A further £300 or 5% of the tax due, whichever is higher |
| 12 months | A further £300 or 5% of the tax due, whichever is higher, or more if the delay is deliberate |
These penalties apply even when no tax is due, which is why non-residents who skip the return because of a loss or a relief are often penalised.
Late Payment Penalties and Interest
Tax is due by the same 60-day deadline. If it is paid late:
- Interest runs from the day after the deadline at HMRC’s late payment rate. See HMRC’s interest rates for late payments.
- Late payment penalties of 5% of the unpaid tax can be added at 30 days, 6 months and 12 months.
Penalties for Errors in the Return
If the return understates the tax, HMRC can charge a penalty based on the extra tax and the behaviour behind the error:
| Behaviour | Maximum penalty |
|---|---|
| Careless | 30% of the extra tax |
| Deliberate | 70% of the extra tax |
| Deliberate and concealed | 100% of the extra tax |
Penalties are reduced, often to nil for careless errors, if you tell HMRC before it finds the problem. Our guide to penalties for late or incorrect CGT returns explains the reductions.
How Non-Residents Get CGT Wrong
- Not filing because no tax is due. Non-residents must report every UK property disposal, including losses.
- Counting the 60 days from exchange. The deadline runs from completion. See the non-resident CGT 60 day rule.
- Using the original cost by default. Rebasing to 5 April 2015 often gives a lower gain. See non-resident CGT rebasing.
- No valuation evidence. A guessed 2015 value can be challenged, turning into an error penalty.
- Claiming full Private Residence Relief. Years abroad only qualify if you met the 90-day test.
- Ignoring UK income. Rental profit uses up the basic rate band and pushes more of the gain into the 24% rate.
- Getting residence wrong. If you were actually UK resident in the year of sale, different rules and deadlines apply.
- Forgetting Self Assessment. If you file one, the gain must also go on it.
Worked Example: How Penalties Add Up
James lives in Dubai. He completes the sale of a UK buy-to-let on 1 March 2026, with £20,000 of CGT due by 30 April 2026. He forgets, and files and pays on 15 December 2026, about 7.5 months late.
| Charge | Amount |
|---|---|
| Initial late filing penalty | £100 |
| 6-month late filing penalty (5% of £20,000, higher than £300) | £1,000 |
| 30-day late payment penalty (5%) | £1,000 |
| 6-month late payment penalty (5%) | £1,000 |
| Interest on £20,000 for about 7.5 months | Charged at HMRC’s late payment rate |
| Penalties before interest | £3,100 |
Filing on time would have cost James nothing extra. If he had a reasonable excuse, such as serious illness, he could appeal the penalties.
What to Do If You Are Already Late
- File as soon as possible. The later the return, the higher the penalties.
- Pay the tax, or an estimate of it, to stop interest growing.
- Appeal if you have a reasonable excuse, within 30 days of the penalty notice.
- Correct errors yourself before HMRC opens an enquiry, to reduce any penalty.
Read our guide on what to do if you miss the CGT deadline, and see how to file a non-resident CGT return. GOV.UK’s report and pay your Capital Gains Tax page has the official service.
Frequently Asked Questions
What are the penalties for not paying capital gains tax?
Interest from the day after the deadline, plus late payment penalties of 5% of the unpaid tax at 30 days, 6 months and 12 months. Late filing penalties are charged separately.
Do non-residents have to pay UK capital gains tax?
Yes, on UK land and property and on shares in UK property-rich companies. See our guide to a non-resident selling UK property.
What is the 4 year rule for HMRC?
HMRC can normally assess extra tax up to 4 years after the end of the tax year. This extends to 6 years for careless errors and 20 years for deliberate ones.
How does HMRC know when CGT is due?
HMRC receives data from HM Land Registry, conveyancers, letting agents and overseas tax authorities, and matches it against returns filed.
Can I appeal a late filing penalty?
Yes, within 30 days, if you had a reasonable excuse such as serious illness or a bereavement close to the deadline.
Conclusion
Non-resident CGT penalties build up quickly: £100 on day one, at least £300 more after 6 months, 5% late payment penalties and interest on top. Almost all of them come from avoidable mistakes, above all not filing because no tax was due.
File within 60 days of completion, keep your valuation and cost evidence, and if you are already late, act now to limit the damage.
For help with a late or complex non-resident return, speak to our non-resident CGT specialists or our CGT returns team. Call us on +44 (0)1204 859315 or send us your question for a free initial consultation and a fixed-fee quote within 24 hours.
