If you're an expat moving to the United Kingdom, understanding the capital gains tax (CGT) system is one of the most important financial steps you can take before — and after — your arrival. Whether you're selling property abroad, disposing of investments, or simply planning your long-term finances, the UK's CGT rules will have a direct impact on your wealth.
This United Kingdom expat tax guide walks you through everything you need to know about expat capital gains tax in the United Kingdom for the 2025/2026 tax year (6 April 2025 to 5 April 2026). We'll cover current rates, the annual exempt amount, residency rules, the new foreign income and gains regime, double taxation relief, and practical examples to help you plan ahead.
What Is Capital Gains Tax in the United Kingdom?
Capital gains tax is a tax on the profit (or "gain") you make when you sell or dispose of an asset that has increased in value. It's the gain that is taxed, not the total amount you receive.
Disposals that may trigger CGT include:
- Selling a second property or buy-to-let
- Selling shares or investment funds
- Disposing of personal possessions worth over £6,000 (excluding cars)
- Giving away an asset (the market value is used)
- Receiving compensation or insurance payouts for an asset
Importantly, your main residence (the home you live in) is usually exempt from CGT under Private Residence Relief, though partial charges can apply in certain circumstances.
UK Capital Gains Tax Rates for 2025/2026
CGT rates in the United Kingdom depend on two factors: the type of asset you're disposing of and your income tax band. For the 2025/2026 tax year, the rates are as follows:
Residential Property Gains
| Income Tax Band | CGT Rate |
|---|---|
| Basic rate taxpayer | 18% |
| Higher or additional rate taxpayer | 24% |
Other Assets (Shares, Personal Possessions, etc.)
| Income Tax Band | CGT Rate |
|---|---|
| Basic rate taxpayer | 18% |
| Higher or additional rate taxpayer | 24% |
Note that from 30 October 2024, the government aligned the lower rate for non-property assets with the residential property rate, meaning all chargeable gains are now taxed at 18% or 24% depending on your taxable income. This is a significant change from earlier years when non-property assets attracted a lower 10%/20% rate.
Annual Exempt Amount (AEA)
Every individual gets an Annual Exempt Amount — a tax-free allowance for capital gains. For 2025/2026:
- Individuals: £3,000
- Trusts: £1,500
This is substantially lower than in previous years (it was £12,300 as recently as 2022/2023), so even modest gains can now result in a CGT liability. Planning disposals carefully across tax years has become more important than ever.
Use our United Kingdom Capital Gains Tax Calculator to estimate exactly how much CGT you'll owe on a specific disposal.
How UK Tax Residency Affects Capital Gains Tax for Expats
Your tax residency status is the single most important factor in determining whether and how the UK can tax your capital gains. The UK uses the Statutory Residence Test (SRT) to determine residency. This is a detailed, rules-based test that considers:
- Automatic overseas tests — You're non-resident if you were resident in the UK in none of the previous three tax years and spend fewer than 46 days in the UK, or if you were resident in one or more of the previous three years and spend fewer than 16 days in the UK.
- Automatic UK tests — You're resident if you spend 183 or more days in the UK, or if your only home is in the UK for a sustained period.
- Sufficient ties test — If neither automatic test is met, your residency is determined by counting your "ties" to the UK (family, accommodation, work, 90-day, and country ties) alongside the number of days spent in the UK.
If You Are UK Tax Resident
As a UK tax resident, you are generally liable to CGT on your worldwide gains — that includes gains on assets located outside the UK, such as overseas property, foreign shares, and international investments.
However, from 6 April 2025, the UK has introduced a fundamentally reformed system for taxing the foreign income and gains of new arrivals. This replaced the old "remittance basis" (also known as the non-domicile or "non-dom" regime).
The New Foreign Income and Gains (FIG) Regime from April 2025
Under the new FIG regime, individuals who become UK tax resident after a period of at least 10 consecutive tax years of non-UK residence can elect for their foreign income and gains to be exempt from UK tax for the first four tax years of UK residence.
Key points about the FIG regime:
- The relief applies to foreign capital gains, foreign income, and foreign employment income.
- You must make an election each tax year you wish to claim.
- There is no requirement to remit or not remit the funds to the UK — the gains are simply exempt regardless.
- After the four-year window expires, you'll be taxed on worldwide gains like any other UK resident.
- The regime is available regardless of your domicile status.
Practical Example:
Sophie, a Canadian national, moves to the UK in August 2025 after living in Canada for the past 15 years. In January 2026, she sells shares in a Canadian company, realising a gain of £80,000. Under the FIG regime, Sophie can elect for this foreign gain to be completely exempt from UK CGT for the 2025/2026 tax year. She does not need to keep the proceeds outside the UK.
If Sophie had sold the same shares in her fifth year of UK residence (2029/2030), she would owe UK CGT on the full gain, subject to any double taxation relief.
If You Are Not UK Resident
Non-residents are generally not liable to UK CGT on most asset disposals. However, there are important exceptions:
- UK residential property: Non-residents have been liable to CGT on gains from UK residential property since April 2015, and this was extended to all UK property and land (including commercial) from April 2019.
- Temporary non-residence rule: If you leave the UK for fewer than five full tax years and dispose of assets during your time abroad, those gains can be taxed when you return. This anti-avoidance rule is critical for expats who plan to return.
Rebasing and the Transition to the New Regime
One of the most generous transitional provisions for the new FIG regime relates to rebasing. If you held assets on 5 April 2017 and were not UK tax resident in any of the previous 10 tax years, you may be able to "rebase" those assets to their market value on 5 April 2017 when you eventually dispose of them.
This means that any growth in value before 5 April 2017 is effectively wiped out for UK CGT purposes. Only the gain accruing from that date onwards is chargeable.
Practical Example:
Marco, an Italian citizen, bought an apartment in Milan in 2005 for €200,000. On 5 April 2017, it was worth €400,000. Marco moves to the UK in 2025 and sells the apartment in 2030 for €550,000.
- Without rebasing: gain = €550,000 - €200,000 = €350,000
- With rebasing: gain = €550,000 - €400,000 = €150,000
Rebasing can dramatically reduce a CGT liability and is an essential consideration for expats with long-held overseas assets.
Double Taxation Agreements and Foreign Tax Credits
One of the biggest concerns for expats moving to the United Kingdom is being taxed twice on the same gain — once in the country where the asset is located, and again in the UK.
The UK has one of the world's largest networks of Double Taxation Agreements (DTAs), covering over 130 countries. These treaties typically include provisions for capital gains that:
- Allocate taxing rights to one country (usually the country where the asset is located for property, or the country of residence for shares)
- Provide tax credits so that tax paid in one country can offset the liability in the other
How Foreign Tax Credit Relief Works
If you pay CGT (or an equivalent tax) in another country on a gain that is also taxable in the UK, you can usually claim Foreign Tax Credit Relief (FTCR). The credit is limited to the lower of:
- The foreign tax actually paid
- The UK CGT due on the same gain
Example:
You sell a property in Spain and pay Spanish CGT of £15,000. The UK CGT on the same gain is £20,000. You can claim a credit of £15,000, leaving only £5,000 payable to HMRC.
If the foreign tax exceeds the UK tax, you generally cannot get a refund of the difference.
Understanding how your total income interacts with CGT bands is also important. Use our United Kingdom Income Tax Calculator to see where your income falls and how it affects your CGT rate.
Reporting and Payment Deadlines for UK Capital Gains Tax
Getting the timing right is crucial. Missing a deadline can result in penalties and interest charges.
UK Residential Property
If you sell UK residential property that is subject to CGT, you must report and pay the tax within 60 days of completion using HMRC's online "Report and pay Capital Gains Tax on UK property" service. This applies to both UK residents and non-residents.
Other Assets
For gains on other assets (shares, overseas property, personal possessions), you report them on your Self Assessment tax return. The key deadlines are:
- Paper return: 31 October following the end of the tax year
- Online return: 31 January following the end of the tax year
- Payment deadline: 31 January following the end of the tax year
For the 2025/2026 tax year, the Self Assessment filing and payment deadline is 31 January 2027.
Registration for Self Assessment
If you're new to the UK and need to file a Self Assessment return, you must register with HMRC by 5 October following the end of your first tax year of arrival. For someone arriving in 2025/2026, the registration deadline is 5 October 2026.
Common Mistakes Expats Make With UK Capital Gains Tax
Avoiding these common pitfalls can save you significant money and stress:
Assuming foreign gains are not taxable: Once your FIG four-year window closes (or if you don't qualify), the UK taxes worldwide gains. Failing to report overseas disposals is a compliance risk.
Forgetting the temporary non-residence rule: If you leave the UK for fewer than five full tax years, gains realised abroad can be "recaptured" on return. Plan any departure carefully.
Not claiming rebasing: Expats who qualify for rebasing to 5 April 2017 values can save substantial amounts. Don't overlook this relief.
Missing the 60-day reporting window for UK property: This is one of the most commonly missed deadlines, and penalties start immediately.
Ignoring currency fluctuations: UK CGT is calculated in pounds sterling. If you buy and sell an asset in a foreign currency, exchange rate movements can create or increase a gain — or even create a gain where there is an economic loss.
Not using the annual exempt amount efficiently: With the AEA now just £3,000, couples should consider spreading disposals between partners and across tax years.
Overlooking reliefs and exemptions: Business Asset Disposal Relief (formerly Entrepreneurs' Relief), Investors' Relief, Private Residence Relief, and gift holdover relief can all reduce or defer CGT. Seek advice to ensure you claim everything available.
Frequently Asked Questions
Do I have to pay UK capital gains tax on assets I owned before moving to the UK?
Yes, once you become UK tax resident (and after your FIG four-year exemption ends, if applicable), gains on overseas assets are taxable. However, rebasing to 5 April 2017 values may be available, which eliminates the gain accrued before that date.
Can I use losses from one country to offset gains in the UK?
Foreign losses can generally be set against foreign gains in the same tax year if you report them on your UK tax return. However, the rules are complex, especially during the FIG election period, so professional advice is recommended.
What happens if I sell my overseas home after moving to the UK?
If the overseas property was your main residence, you may qualify for Private Residence Relief (PRR), which can exempt part or all of the gain. The final nine months of ownership are always covered by PRR, regardless of whether you lived there. The FIG regime may also exempt the gain entirely if you're within your first four years of UK residence.
Is there a difference between short-term and long-term capital gains in the UK?
No. Unlike some countries (such as the United States), the UK does not distinguish between short-term and long-term capital gains. The same rates apply regardless of how long you've held the asset.
How do I calculate my capital gains tax liability?
The basic calculation is:
- Disposal proceeds (or market value)
- Minus allowable costs (purchase price, improvement costs, transaction fees)
- Equals the gain
- Minus the Annual Exempt Amount (£3,000)
- Taxable gain is then charged at 18% or 24% depending on your income
For a quick estimate, try our United Kingdom Capital Gains Tax Calculator.
Conclusion: Plan Early, Save More
Moving to the United Kingdom as an expat opens up incredible personal and professional opportunities — but the tax implications, particularly around capital gains, require careful planning. Here are the key takeaways for 2025/2026:
- CGT rates are 18% and 24% across all asset types, with an annual exempt amount of just £3,000.
- The new FIG regime offers up to four years of exemption on foreign gains for qualifying new arrivals — a powerful benefit that replaces the old non-dom system.
- Rebasing to 5 April 2017 can dramatically reduce gains on long-held overseas assets.
- Double taxation agreements and foreign tax credits prevent most cases of being taxed twice.
- The 60-day reporting rule for UK property disposals and Self Assessment deadlines must not be missed.
- Currency fluctuations, the temporary non-residence rule, and efficient use of allowances are areas where expats frequently make costly mistakes.
Take the time to understand your obligations, model different scenarios using our United Kingdom Capital Gains Tax Calculator, and consult a qualified cross-border tax adviser before making major financial decisions.
This article is for informational purposes only and does not constitute tax advice. Tax laws change frequently; consult a qualified tax professional for advice specific to your situation.