Guide to CGT rules for UK expat property owners
The rule used to be that as long as an expat had been non-UK resident for five consecutive tax years, then they would not be taxed on any gains made when they sold UK property.
However, as of 6th April 2015, that ceased to be the case.
Now, if you are an expat who owns UK property, you will potentially need to pay Capital Gains Tax (CGT).
It doesn’t matter how long you have lived outside the UK or even if you never intend to return, the taxman still wants his cut.
How is Capital Gains Tax on UK property calculated for expats?
In most cases, you will be able to rebase the value of your property to the 5th of April 2015.
You will then pay tax in the same way as UK residents do. I.e. the net gain (on the post 5th April 2015 valuation) less any unused annual allowance (GBP12,000 in tax year 2019/2020) is added to any other UK income for the tax year in question.
Depending on your tax bracket, this amount will then be taxed at either 18% or 28%.
Can expats avoid paying Capital Gains Tax on UK property?
If you lived in the property for 90 days or more in the year in which you sold it, you would meet the conditions for private residence relief (PPR). In this case, you wouldn’t have to pay CGT.
Be careful with this however. It may push you into a different residence category for tax according to the UK’s Statutory Residence Test. This could have serious implications on your overall tax position.
How do I report the gain and when is the tax payable?
You have 60 days from the date of sale to complete a Non-Resident Capital Gains Tax Return.
It is important to note that this return needs to be completed even in cases where no capital gain has been made, or assumed to be made.
Any CGT incurred following the disposal of the property will have to be paid within the same 60-day period.
Failure to pay on time will result in HMRC imposing interest and potential penalties.
This rule also applies even where no money has changed hands. For example, the rule will also apply when a property is transferred into trust or gifted to a family member.
❓ Frequently Asked Questions
Do expats have to pay Capital Gains Tax on UK property?
Yes, since 6 April 2015, non-UK residents may be liable for Capital Gains Tax (CGT) on UK residential property gains, regardless of how long they’ve lived abroad.
How is the gain calculated for CGT purposes?
In most cases, the property’s value is rebased to 5 April 2015. Tax is then paid on the gain above this value, after deducting any available annual allowance.
What CGT rates apply to expats selling UK property?
The rates are the same as for UK residents—18% for basic rate taxpayers and 28% for higher/additional rate taxpayers.
Can CGT be avoided on a UK property sale?
If you lived in the property for 90+ days in the tax year of sale, you may qualify for Private Residence Relief and not owe CGT. However, this can affect your UK tax residence status.
What is the reporting deadline for CGT as a non-resident?
You must report the sale to HMRC within 60 days of completion, using the Non-Resident Capital Gains Tax Return—even if no tax is due.
When is the CGT payment due?
Any tax owed must be paid within the same 60-day period following the sale. Late payment can result in penalties and interest from HMRC.
Do I have to report a property transfer if no money changed hands?
Yes. Even if the property is gifted or transferred into a trust, it must be reported and may be subject to CGT.
What happens if I don’t submit the return on time?
Failure to submit the CGT return within 60 days may lead to interest charges and financial penalties imposed by HMRC.
How can I calculate my potential CGT liability?
You can use HMRC’s online calculator for non-resident CGT to estimate your liability: Calculate CGT.
Where can I find more guidance?
Visit the official HMRC guide: Capital Gains Tax for Non-Residents.
Ross is a qualified Chartered Financial Planner and Pension Transfer Specialist.
He has been a cross-border financial adviser for 25 years and specialises in helping British expats manage their finances with clarity and peace of mind.
If you would like to have a no strings chat with him, please get in touch.
