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Social security contributions in the United Kingdom, known as NICS (National Insurance Contributions), are mandatory for employees, employers and self-employed workers. These contributions finance various state benefits, such as state pensions, sickness or maternity benefits, and other social assistance.
As of fiscal year 2025/26, the applicable rates reflect the changes announced in the Fall 2024 Budget:
On the other hand, the mandatory Class 2 contribution was eliminated in April 2024, although the rights to access social benefits are maintained. Self-employed workers who wish to continue to pay voluntary contributions can do so for 3.50 GBP per week.
In the United Kingdom, capital gains earned by individuals are subject to taxation, although there is an annual exemption of 3,000 GBP for the 2025/26 tax year. Profits that exceed that threshold are taxed at a basic rate of 18% and a maximum rate of 24% as of October 30, 2024, which also applies to profits obtained from the sale of residential properties.
Certain types of income, such as those obtained by sharing profits or accrued interest, are still subject to a more burdensome regime: they are currently taxed at 28%, but this rate will increase to 32% as of April 6, 2025. Then, starting in April 2026, the entire IGC regime will be integrated into income tax.
In the case of trusts, the annual exemption is usually half that applicable to individuals. In addition, if a person not domiciled in the United Kingdom chooses to tax on the basis of remittances, they lose the right to the annual exemption from the IGC.
The calculation of capital gains takes into account the acquisition value of the asset (adjusted for improvements) and the costs associated with its acquisition and subsequent disposal, such as legal fees or advertising costs. For assets acquired before 1982, special rules apply. For the sale of private homes, the primary residence exemption may apply. Earnings can also be deferred if the donated assets meet certain conditions.
There are special rules to identify stocks sold among others of the same class, as well as to prevent the immediate repurchase of assets (“bed and breakfasting”), which could be used to generate artificial losses.
Since October 2021, UK residents must declare and pay the IGC within 60 days of the sale of taxable residential property. Non-British residents are also subject to this tax if they sell real estate (residential or commercial) or shares in companies with a relevant real estate component in the United Kingdom.
As of April 6, 2025, the concept of “domicile” was eliminated as a determinant of the scope of the tax obligation in relation to capital gains, being replaced by a regime based solely on tax residence. Those who have resided in the United Kingdom for more than four years will be subject to tax on their global income and profits. Until then, non-domiciled residents could choose to tax only income and earnings remitted to the United Kingdom, although they renounced the annual exemption and, in some cases, had to pay a fixed sum of up to 60,000 GBP for that right.
In addition, there are rules of temporary non-residence: if a person leaves the United Kingdom for less than five tax years and returns, they could be subject to the IGC for profits generated during their absence, if the assets were acquired before their departure.
Rules were also introduced on the overstatement of the value of assets held outside the United Kingdom by persons considered to be domiciled on April 6, 2017. Under certain conditions, they were able to update the value of their assets as of April 5, 2017 for tax purposes.
Regarding the taxation of non-residents, although they are generally not subject to the British IGC, there are important exceptions. Since 2019, all profits earned from the direct or indirect sale of property in the UK have been taxed. This includes shares in foreign companies whose value derives, by at least 75%, from real estate located in the United Kingdom. If a taxpayer directly or indirectly owns at least 25% of that entity (currently or in the two years prior to the sale), they will also be subject to the IGC.
In these cases, the original value of the asset or its value at the start of the regime in 2019 can be used as a cost basis. However, if you choose the original cost and the operation generates a loss, this will not be deductible. IGC declarations and payments must be made within 30 days of the disposal, or 60 days if the transaction was completed after October 27, 2021.
Exchange rate earnings on assets denominated in foreign currency must also be taken into account. Although there is an exemption for foreign currency used for personal expenses or held in bank accounts, it does not apply to other forms of holding.
With regard to movable property, such as art, jewelry or antiques, if their useful life exceeds 50 years and are sold for more than 6,000 GBP, they are considered subject to the IGC, although there are special limits and calculation rules. Goods with a lifespan of less than 50 years—such as old machinery—are usually exempt if they wear out over time.
The standard VAT rate is 20%.
In the United Kingdom, there is no annual tax that taxes a person's total wealth.
In the United Kingdom, inheritance tax applies to the value of assets that exceed the tax-free threshold (NRB), set at 325,000 GBP and frozen until April 2030. This tax applies both to death and, in some cases, to donations made during life, especially if they are made to trusts or if the donor dies within the following seven years (potentially exempt transfers or PET).
Since April 6, 2025, this tax is no longer based on domicile, but on tax residence. Only those who have resided in the United Kingdom for at least 10 of the last 20 tax years (known as LTR, or long-term residents) are subject to the IHT on their assets abroad. If an LTR leaves the UK, it will remain exposed to British IHT for a period of up to ten years.
Assets located in the United Kingdom are always subject to tax, regardless of the holder's residence or status. On the other hand, assets abroad owned by people other than LTR are considered excluded and are not taxed by IHT.
Transfers between spouses or domestic partners are usually exempt. However, if a UK LTR transfers assets to a partner who is not, the exemption is limited to 325,000 GBP, unless the recipient chooses to be treated as a long-term resident.
Since the rules can be complex, it is recommended to seek professional advice in specific situations, especially if there are international structures or trusts involved.
It taxes home occupants at a fixed rate per property. Vacant homes are taxed to the landlord. Local authorities also receive funding for commercial property taxes and grants from the central government.
Since April 2017, closed foreign companies or companies that own residential property in the United Kingdom are subject to Inheritance Tax. This includes loans and guarantees related to those properties. The tax may apply if you die owning these shares, when donating shares or on anniversaries of trusts that own these properties.
Since August 2022, all foreign entities that buy, sell or transfer property in the United Kingdom must register with the Commercial Register, declaring their beneficial owners.
The purchase of homes by non-individuals (companies) in England and Northern Ireland pays a progressive tax of up to 17% (formerly 15%), with an additional surcharge of 5% for second homes and another 2% for non-resident buyers, reaching up to 19%. Scotland and Wales have similar specific taxes.
It applies to residential properties in the United Kingdom owned by non-individuals (companies, corporations or funds). The annual declaration and payment must be made before April 30. The tax taxes property valued at more than 500,000 GBP and affects both resident and non-resident entities. Trustees are not subject to this tax.
In the United Kingdom, these taxes do not apply to individuals.
Home purchases by non-resident companies or legal entities, as well as those who purchase second homes, can be taxed up to 17% (formerly 15%).
People who buy their first home or replace their primary residence pay up to 12%.
If the property exceeds 500,000 GBP and is not used for business purposes, companies are taxed at 17%. For purchases over £1.5 million, the rate may be 17% or 12%, depending on the buyer.
Since April 2021, a 2% surcharge has been added for non-resident buyers, which can bring the rate to 19%.
They are also subject to this tax, with a maximum rate of 5% on the value exceeding 250,000 GBP.
A similar tax applies, with rates of up to 12% for homes exceeding 750,000 GBP, or up to 20% with the 8% surcharge for second homes.
For non-residential properties, the rate reaches 5%.
The rate reaches 12% for homes over 1.5 million GBP, or up to 17% if it is a second home (with a 5% surcharge).
For non-residential properties, up to 6% applies.
In the United Kingdom, those who travel abroad by plane must pay a tax that is usually already included in the price of the ticket. The amount varies depending on the distance from the destination (geographical range) and the class in which you are traveling.
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