Capital gains tax on UK company shares: what non-resident directors need to know

One of the most common questions we receive from Arab directors thinking about the future of their UK company is: if I sell my shares, does the UK take capital gains tax? The answer under UK domestic law for most non-residents selling shares in a non-property UK trading or holding company is: no, UK CGT does not apply.

The key rule: under UK domestic law, non-UK residents are generally not subject to UK capital gains tax on gains from UK company shares unless the company is UK property-rich. A company is considered UK property-rich if more than 75% of its gross asset value derives from UK land or property. For most Arab directors running a UK trading company, a holding company, or a services business, the company will not be UK property-rich.

However, since April 2019, HMRC extended UK CGT to non-residents for disposals of UK land and interests in UK property-rich companies. If your UK company primarily holds UK real estate — commercial property, residential investment, or development land — selling your shares could trigger a UK CGT liability even if you live in the UAE or Saudi Arabia. The rate can reach 20% on the gain for non-residential property businesses.

What about double tax treaties? Most Gulf states (UAE, Saudi Arabia, Kuwait, Qatar, Bahrain, Oman) have double taxation agreements with the UK. Many of these treaties allocate taxing rights on gains from company shares to the country of residence of the seller, not the UK — meaning a UAE or Saudi resident selling shares in a non-property UK company would owe no UK tax even if domestic rules were to apply. But treaty eligibility requires the seller to be genuinely treaty resident, and treaty claims must be filed correctly.

The practical takeaway: if your UK company does not hold UK property, selling your shares as a Gulf resident almost certainly carries no UK CGT exposure. If it does hold UK property — or if you are planning a restructure, buyout, or exit — take professional advice before transacting, not after. The reporting obligation for non-resident CGT disposals is on a short timeline: within 60 days of completion.

Fileminder can provide initial guidance on whether your company structure is likely to be within scope, and refer you to specialist UK tax counsel for formal advice on exits or restructures.