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Legal compliance for Japanese nationals purchasing
property in the UK

When purchasing property in the UK, a range of legal checks and procedures are required for both buyers and sellers, regardless of nationality or residence. Below is a clear summary of the legal compliance required when a Japanese resident seeks to buy property in the UK.

Anti-Money Laundering (AML) checks

Under UK law, both buyers and sellers involved in a property transaction are subject to Anti-Money Laundering (AML) checks. Checks for buyers typically include:

Proof of identity: Passport and proof of address (such as utility bills or bank statements)
Proof of funds: Bank statements (covering the past 3–6 months), payslips, or tax returns
In the case of gifts or inheritance: A gift letter or inheritance documents, together with proof of the donor’s or benefactor’s source of funds
For overseas residents: Additional “Enhanced Due Diligence” is often required

These checks are carried out by a solicitor or conveyancer.

Sanctions checks

A sanctions check is also carried out to ensure that the parties involved do not appear on the sanctions lists published by the UK government (OFSI).
This applies to both buyers and sellers, and is undertaken by financial institutions, solicitors, and estate agents.
If either party, or the funds involved, are linked to sanctioned individuals or countries, the transaction will be blocked.

Conveyancing (contracts and registration)

When purchasing property in the UK, it is necessary to appoint a solicitor or conveyancer, who will undertake the following:

Title investigation: Confirming ownership and checking for existing mortgages or charges
Property searches: Enquiries with the local authority regarding planning issues, road schemes, environmental risks, water and drainage, and flood risk
Exchange of contracts: At this point the agreement becomes legally binding, and the buyer usually pays a 10% deposit
Completion: The balance is paid, the property is handed over, and registration is carried out with HM Land Registry

Taxes and additional costs

Stamp Duty Land Tax (SDLT): Payable on purchases above certain thresholds. Non-residents, including Japanese residents, are subject to an additional 2% surcharge on top of the standard rates. (Further surcharges may apply for buyers who already own multiple properties.)
Capital Gains Tax (CGT): Payable on any profit made when selling the property, even for non-residents.
Other costs: Land Registry fees and solicitor’s fees are also payable.

Additional requirements for Japan-based buyers

If you reside in Japan while purchasing UK property, the following additional requirements often apply:

Certified identification documents: Identity documents must usually be certified by a Japanese notary, lawyer, accountant, or the British Embassy.
Translation of Japanese documents: Documents such as tax certificates or inheritance papers may need to be translated into English.
Checks on overseas transfers: When transferring funds from Japan, banks will also carry out AML and sanctions checks and may require explanations of the purpose of the transfer and the source of the funds.
Mortgage restrictions: Standard UK residential mortgages are generally not available to overseas residents. Buyers are typically limited to “Expat Mortgages” or other specialist products, often requiring larger deposits.

Frequently asked questions

Yes. Additional requirements include:

Certified copies of identification documents
English translations of Japanese documents
Verification of transfer purpose and source of funds by banks during overseas remittances
Restrictions on mortgages, with availability generally limited to specialist “Expat Mortgages”

The following UK taxes apply when purchasing and owning property:

Stamp Duty Land Tax (SDLT): Charged according to the purchase price. Non-residents (including Japanese residents) pay an additional 2% surcharge.
Capital Gains Tax (CGT): Applies to profits made on the sale of the property, even for non-residents.
Income Tax (rental income): Rental income is subject to UK Income Tax.
- For non-residents, tax is collected either through withholding under the Non-Resident Landlord Scheme or through self-assessment with HMRC.
- Deductible expenses include mortgage interest, management fees, and repair costs.
- Rental income is also taxable in Japan, but double taxation can be mitigated by the UK–Japan tax treaty and foreign tax credits.

Other costs: Land Registry fees, solicitor’s fees, and other administrative charges.

Note on Future Tax Changes

UK property taxation is under frequent review. In addition to current systems (SDLT, CGT, and rental income tax), the following reforms are being considered:

Extension of National Insurance contributions to rental income
Reform of Stamp Duty: Potential move from a one-off purchase tax to an annual property tax for higher-value properties

These remain at the proposal stage and are expected to be considered in the Autumn Budget 2025, with possible implementation from April 2026.

👉 The information in this document is based on the current system, but may change in the future. Always check the latest official guidance from HMRC or seek advice from professional advisors.

Passport
Proof of address (utility bills, bank statements, etc.)
Bank statements showing purchase funds (covering 3–6 months)
Payslips, withholding tax certificates, or tax returns
Documents relating to gifts or inheritance, including proof of the donor’s/benefactor’s source of funds
Translations or certification may be required depending on the document

Legal compliance for Japanese nationals purchasing property in the UK