UK Tax Guide

UK Tax Implications for Saudi Property

What UK residents and citizens need to know about their HMRC obligations when investing in Saudi Arabia property.

Reviewed by a UK-qualified tax advisor. Content accurate as of January 2026. Subject to change.

Disclaimer: This guide is for general information only and does not constitute tax advice. Your individual circumstances may differ. Always consult a UK-qualified tax advisor (e.g., a Chartered Tax Adviser or accountant) before making investment decisions.

Saudi vs UK Tax Comparison

Tax	Saudi Arabia	UK Equivalent	Notes
Capital Gains Tax	0%	18–28%	Saudi Arabia has no CGT on property. UK residents must still report Saudi property gains to HMRC under UK CGT rules.
Annual Property Tax	0%	Council Tax / SDLT varies	No annual property tax in Saudi Arabia. UK equivalent (council tax) not applicable to overseas property.
Transaction Tax	5% RETT (once)	SDLT 2–12%+ (once)	RETT is paid once at purchase — comparable to (or lower than) SDLT on UK property.
Rental Income Tax (Saudi)	0% (individuals)	N/A	Saudi Arabia levies no income tax on rental income for individual foreign investors.
Rental Income (UK)	N/A	Marginal rate (20–45%)	UK residents must declare Saudi rental income on UK self-assessment. Subject to UK income tax at your marginal rate.
SDLT on Saudi Property	N/A	0%	UK Stamp Duty Land Tax only applies to UK land transactions. SDLT is not charged on overseas property purchases.
Inheritance Tax	0%	40% (above UK threshold)	Saudi Arabia has no IHT. UK residents' worldwide estates (incl. Saudi property) are potentially subject to UK IHT. Specialist advice essential.

Key UK Obligations for Saudi Property Investors

Capital Gains Tax — Must Report to HMRC

When you sell Saudi Arabia property and make a profit, you must report this gain to HMRC and pay UK Capital Gains Tax. The rate is: • 18% (basic rate taxpayer) • 24% or 28% (higher rate taxpayer, depending on whether it's residential) You have an annual CGT allowance (£3,000 for 2025/26 tax year). Gains above this are taxable. You must report within 60 days of completion. The gain is calculated in GBP at the exchange rate applicable on the dates of purchase and sale. Currency movements can affect your taxable gain.

Rental Income — Self Assessment Required

All rental income from Saudi Arabia property must be declared on your UK Self Assessment tax return, even if you have already paid tax overseas (though a tax credit may apply under HMRC's unilateral relief provisions). Key points: • You must register for Self Assessment if not already doing so • Rental income is taxed at your marginal income tax rate (20%, 40%, or 45%) • You can deduct allowable expenses: mortgage interest (restricted), management fees, maintenance, insurance, NAL Lawyers fees • Keep all records in GBP equivalents using HMRC-approved exchange rates

Stamp Duty Land Tax (SDLT) — Not Applicable

SDLT applies to land and property transactions in England and Northern Ireland only (LBTT in Scotland, LTT in Wales). There is no SDLT charge on overseas property purchases. You do not pay UK SDLT when buying property in Saudi Arabia. The 5% RETT is the only transaction tax.

Inheritance Tax — Seek Specialist Advice

UK residents with worldwide assets above the IHT threshold (£325,000 individual, £650,000 couple) may be subject to 40% UK Inheritance Tax on Saudi property held at death. This is a complex area — we strongly recommend specialist UK IHT and estate planning advice before acquiring overseas property.

Double Taxation Agreement

As of January 2026, the UK and Saudi Arabia do not have a comprehensive double taxation agreement (DTA) covering property income and gains. This means there is a risk of double taxation on some income streams.

However, HMRC provides unilateral relief in many cases — allowing you to claim a credit for Saudi taxes paid against your UK tax bill. Since Saudi Arabia charges 0% on most individual property income and gains, double taxation risk is generally low in practice.

Always confirm the current DTA position with a qualified UK tax advisor before investing.

UK Investor Tax Checklist

Keep records of purchase price in GBP at acquisition date

Record all rental income in GBP using HMRC exchange rates

Retain all receipts for deductible expenses

Report rental income annually on Self Assessment

Report capital gain within 60 days of sale

Consider HMRC non-resident landlord scheme if applicable

Seek specialist IHT advice for estate planning

Consult a Chartered Tax Adviser (CTA) before proceeding

Have questions about the legal process in Saudi Arabia?

Book a Consultation