Capital Gains Tax for Expats: Complete 2025 Guide

Capital Gains Tax for Expats

Navigating Capital Gains Tax (CGT) as an expat in the UK requires clarity on rates, reporting, residency protocols, and reliefs. This expert guide from UK Bloom offers practical insight and actionable steps tailored to your international lifestyle.

Disclaimer: This article is for informational purposes only. Always consult the UK Home Office or an immigration lawyer for personalized advice.

What Is Capital Gains Tax?

Capital Gains Tax (CGT) applies to profits from selling or disposing of chargeable assets. It’s calculated on the gain – the difference between the disposal proceeds and the acquisition cost, including allowable deductions.

CGT applies to:

Property sales (excluding primary residences with reliefs)
Shares, stocks, and crypto-assets
Business assets or interests
Personal possessions over £6,000 (e.g. antiques, art)

CGT Rates and Annual Exempt Amount

For the 2025/26 tax year:

Asset Type	Basic Rate (Income ≤ £50,270)	Higher/Additional Rate (>£50,270)
Residential Property	18%	28%
Other Chargeable Assets	10%	20%

Annual Exempt Amount: £6,000 for individuals (£3,000 from April 2026)
Losses may be offset against gains or carried forward indefinitely

UK Residency and CGT

Your CGT liability is tied directly to your residency status under the Statutory Residence Test:

UK residents are liable for CGT on worldwide assets
Non-residents are taxed only on UK-based property and certain UK assets
Split-year treatment may apply during relocation years

Check your UK tax residency status here

CGT for Non-Resident Expats

As a non-resident:

CGT applies only to UK residential property and land
Mandatory 60-day reporting via HMRC’s UK Property Reporting Service
UK commercial property disposals also within scope
Overseas assets generally excluded unless temporary non-residency rules apply

Temporary non-residents (out of UK <5 years) may still be taxed on overseas gains made during absence.

Assets Subject to CGT

Capital Gains Tax applies to:

UK and overseas residential property
Shares, bonds, mutual funds
Crypto-assets like Bitcoin or Ethereum
UK business goodwill or interest
High-value personal possessions

Exempt items include:

ISAs
UK government gilts
Winnings from lotteries or betting

Main Residence Relief (PRR)

Private Residence Relief (PRR) offers full or partial CGT exemption:

Applies if the property was your main home
Final 9 months of ownership always exempt, regardless of use
Overseas-based owners must prove UK property was primary residence

Learn more about UK property taxation

Lettings Relief for Expat Landlords

Lettings Relief may apply if:

You once lived in the property
Part or all of it was let to tenants
Up to £40,000 gain per owner can be exempt

Lettings Relief only applies where PRR is available.

Other Reliefs and Exemptions

Business Asset Disposal Relief (BADR): 10% tax on first £1 million of qualifying gains
Rollover Relief: Defer tax by reinvesting in new business assets
Hold-over Relief: Delay CGT when gifting qualifying assets
Spousal Transfers: No CGT payable between married couples/civil partners

Reporting Deadlines and Penalties

File Property Disposal Return within 60 days of completion (non-residents and UK residents)
Pay CGT owed within same timeframe
Late filing: automatic £100 penalty, plus interest and further charges

Also report in your Self Assessment if registered.

Double Taxation Agreements (DTAs)

The UK has tax treaties with over 130 countries. DTAs:

Prevent double taxation on the same gain
Allow foreign tax credit offset against UK CGT
Usually require active claim via Self Assessment

See the UK DTA list

CGT on Overseas Assets

UK residents must declare gains from:

Sale of overseas property or shares
Crypto held on international platforms

CGT calculated in GBP. Currency conversion required at date of disposal.

Use HMRC’s exchange rates: Official exchange rates

UK Property Disposal Return (PDR)

You must submit a UK Property Disposal Return:

Within 60 days of completion
Even if gain is within exemption or loss
Pay CGT within same period

Applicable to residents and non-residents alike.

Planning Strategies to Minimise CGT

Use both annual allowances across tax years
Time disposals across tax thresholds
Split ownership with a spouse for dual exemptions
Consider moving to lower-tax jurisdictions (carefully)
Offset unused past capital losses
Reinstate residency in low-CGT periods
Gift or transfer to spouse to delay tax

Internal Resources on UKBloom

Capital Gains Tax Calculator
UK Tax System for Expats Guide
Residency and Tax Checker Tool
Taxable vs Non-Taxable Income
Pension Taxation for Expats

Understanding and planning for Capital Gains Tax can significantly reduce your tax burden as an expat. Always remain aware of reporting duties and legal updates to ensure compliance.

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