UK Capital Gains Tax (CGT): A Guide for British Expats

Leaving the UK does not end your UK tax obligations. For British Expats in Singapore, CGT on UK land and property assets, however held, and certain types of UK shares remains an active liability. At Spice Taxation, our advisers have spent over 30 years helping British expats pay exactly what they owe, but not a penny more. This guide shows you how.

What is Capital Gains Tax (CGT)?

CGT is a tax on the profit you make when you dispose of an asset that has increased in value. It applies to the gain, not the sale price. If you bought a flat for £200,000 and sold it for £350,000, CGT applies to the £150,000 gain.

A ‘Disposal’ includes selling, gifting, transferring, assigning, swapping, or receiving compensation when an asset is lost or destroyed. Not all of your gain is necessarily taxable – you can deduct certain costs, reliefs and the annual CGT allowance before any tax is calculated. The remaining amount is your Chargeable Gain, which is added to your taxable income for that year to determine whether you pay CGT at 18% or 24%.

How Capital Gains Tax Is Reported

CGT involving UK land and property is reported and paid through HMRC’s UK Property Account within 60 days of completion.You will need a Government Gateway account to do this, or you can file paper forms if you prefer. For all other assets, disposals are reported through the Capital Gains pages in the Self Assessment Tax Return.

Who Pays Capital Gains Tax?

UK residents pay CGT on gains from assets worldwide, unless they qualify for relief under the Foreign Income and Gains (FIG) regime. Non-UK residents pay CGT on UK land and property assets, shares in ‘property rich’ companies and on UK situated trading assets.

Your liability as a British Expat depends on your residence status not your passport or where you live. Your residence status is determined on an annual basis using the Statutory Residence Test. If you are resident in the UK for tax purposes, CGT typically applies to your worldwide gains. If you are non-UK resident, CGT still applies to UK land and property, including buy-to-let and commercial property and trading assets. It is important to be able to understand and navigate the Statutory Residence Test in order to determine your tax position in any tax year.

What is the Capital Gains Tax Allowance?

The Capital Gains Tax allowance, known as the Annual Exempt Amount, is the amount of gain you can make each tax year before CGT becomes payable. It is available to anyone who is liable to Capital Gains Tax, regardless of whether you are resident in the UK or not.

For the 2026/27 tax year, the allowance is set at £3,000, which means that the first £3,000 of net gains in the tax year is free from CGT. Married couples and civil partners each have their own separate allowance, effectively doubling the tax-free threshold where assets are held jointly or transferred between spouses before disposal. The allowance cannot be carried forward if unused. It was £12,300 as recently as 2022/23 and is unlikely to increase until the 2031/32 tax year.

When Does Capital Gains Tax Apply?

Property you own

Residential property that has not always been your main home and commercial property is subject to CGT on disposal. If you lived in the property as your main residence for part of your ownership, Principal Private Residence (PPR) relief may apply proportionately, including certain deemed periods of occupation.

Inherited assets

When someone dies, any latent gains in assets they held are exempt from Capital Gains Tax. You are treated as having acquired them at their value on the date of death. However, if they go up in value after you have received them, CGT applies on the gain from the date of death valuation to the sale price.

Jointly owned assets

Each owner is assessed on CGT based on their share of the asset. Where the asset is owned equally, each owner is liable for 50% of the gain. However, ownership can be split differently. Where that is the case, each owner is assessed on their actual percentage share. Transfers between spouses or civil partners who are ‘living together’ are treated as taking place at ‘no gain and no loss’ and do not therefore trigger CGT at the time of transfer.

Other business assets

The sale of a business, business shares, or commercial premises can trigger CGT. Business Asset Disposal Relief may reduce the effective rate if conditions are met. For a British Expat who is Non-Resident, CGT does not typically apply on these types of assets, unless the Temporary Non-Residence Provisions apply (see below).

Personal possessions worth £6,000 or more

Chattels worth more than £6,000 are potentially chargeable. Items below that threshold and all motor cars are typically exempt.

Gifts and other disposals

Gifting an asset is treated as a ‘disposal’ at its market value. HMRC calculates the gain as though you sold it at the open market value on an ‘arms length’ basis on the date of transfer where the gift is to someone you are connected with. You are typically connected, for tax purposes, to your close family members, business partners and trustees of trusts in which you are involved. However, gifts of assets to UK registered charities are exempt from Capital Gains Tax.

Investment funds and shares

Gains from shares, unit trusts, OEICs, and ETFs etc held outside of a ‘tax wrapper’ (ISA, pension and certain investment account types) are subject to CGT upon disposal. As a British Expat you are not typically subject to tax on the disposal of investment assets. If you decide to repurchase the same asset whilst Non-Resident, you must ensure that the repurchase does not take place on the same day as the sale – otherwise, HMRC would look through the transaction. If you are UK resident when you wish to repurchase the same asset, you must wait for 30 full calendar days before doing so, otherwise the ‘look through’ applies.

It is also important to note that the gains from certain non-UK unit funds may be liable to Income Tax in the hands of a UK resident at rates of up to 45% rather than Capital Gains Tax at a maximum rate of 24%. Understanding the CGT position of all of your investment assets is important, particularly if you will be relocating back to the UK.

Cryptocurrencies

HMRC treats crypto as a capital asset. Selling, exchanging, or using crypto to purchase goods are all treated as disposals and can trigger CGT. Non-Residents are typically exempt from CGT on the sale of Cryptoassets. However, if you move to the UK it is important to note that Cryptoassets are treated as being located where you are resident for tax purposes. So, it would make sense to ‘take gains’ from crypto before relocating.

Art, antiques and fine jewellery

High-value personal possessions worth more than £6,000 are chargeable assets. A significant gain on disposal could give rise to a meaningful CGT liability.

When Does Capital Gains Tax Not Apply?

Tax Wrappers (e.g. Pensions and certain investment accounts)

Growth within a pension wrapper, including a SIPP, is entirely free from CGT. Also, gains realised from the sale of units in funds held within an onshore or offshore life assurance portfolio bond is not liable to tax in the year of disposal – albeit, other tax exposures exist for such account types in the hands of UK residents.

Individual Saving Accounts (ISAs)

Gains within an ISA are exempt from CGT regardless of size. British expats can retain an existing ISA after leaving the UK but cannot make new contributions once non-UK resident.

UK Gilts and Premium Bonds

UK Government Bonds (known as Gilts) and National Savings and Investments (NS&I) Premium Bonds are exempt from CGT. Premium Bond prize winnings are also tax-free.

Betting, Lottery, or Pools Winnings

Winnings from gambling, the National Lottery, or football pools fall outside the scope of CGT entirely.

Wasting assets

Assets with a predictable life of 50 years or less are exempt from CGT. Examples include plant and machinery, natural resources such as coal and natural gas, furniture, certain leases, certain consumables, chattels and domestic motor cars.

Capital Gains Tax Rates in the UK for 2025/2026 Tax Year

The October 2024 Autumn Budget raised CGT rates on non-property assets and began a two-stage increase in Business Asset Disposal Relief. The table below shows the full rate history from 2024-25 onwards.

Rate / Allowance	2026-27	2025-26	30 Oct 2024 to 5 Apr 2025	6 Apr 2024 to 29 Oct 2024
Standard rate (basic rate taxpayers)	18%	18%	18%	10%
Standard rate (higher/additional rate taxpayers)	24%	24%	24%	20%
Residential property (basic rate)	18%	18%	18%	18%
Residential property (higher rate)	24%	24%	24%	24%
Carried interest (basic rate)	Income Tax	32%	18%	18%
Carried interest (higher rate)	Income Tax	32%	28%	28%
Trusts	24%	24%	24%	20%
Trusts: residential property	24%	24%	24%	24%
Business Asset Disposal Relief (BADR)	18%	14%	10%	10%
Investors’ Relief (IR)	18%	14%	10%	10%
BADR lifetime limit	£1m	£1m	£1m	£1m
IR lifetime limit	£1m	£1m	£1m	£10m
Annual exemption (individuals)	£3,000	£3,000	£3,000	£3,000
Annual exemption (settlements/trusts)	£1,500	£1,500	£1,500	£1,500

Key changes to note:

CGT rates: The lower rate rose from 10% to 18% and the higher rate from 20% to 24% for non-property assets, effective 30 October 2024. The rate for trustees and personal representatives also moved to 24%.

Business Asset Disposal Relief and Investors’ Relief: Rates rose from 10% to 14% from 6 April 2025, and rose again to 18% from 6 April 2026.

Carried interest: Taxable at 32% from 6 April 2025. From 6 April 2026, carried interest ceased to be liable to CGT at all — it is now subject to Income Tax and National Insurance instead.

Annual exempt amount: Held at £3,000 since April 2023, reduced from £12,300 in 2022/23.

Scottish and Welsh taxpayers: CGT is always calculated using UK rates and bands, regardless of whether your income is taxed at devolved rates.

If you pay higher rate Income Tax

You pay 24% on gains from residential property and other chargeable assets from 6 April 2025. Carried interest gains are taxed at 32%.

If you pay basic rate Income Tax

You pay 18% on gains from residential property and other chargeable assets. If your gain pushes you into the higher rate band, the portion above the band is taxed at 24%.

To work out your rate: calculate taxable income after Personal Allowance and reliefs, deduct the CGT annual allowance from your total gains, add the remainder to your taxable income, and apply the relevant rate to each portion.

How is Capital Gains Tax Calculated?

Proceeds

In a standard sale this is the sale price. In a gift or transfer, proceeds are taken as the open market value on the date of disposal where the gift or transfer is to a connected person.

Original cost

What you paid to acquire the asset, including stamp duty, legal fees, and surveyor fees. For inherited assets, the original cost is the market value at the date of death. For assets owned on 31 March 1982, HMRC uses the market value on that date as the base cost rather than the original purchase price.

Where you are Non-Resident at the point of disposing of residential property in the UK and you owned that property on 6th April 2015, you are allowed to take the market value of the property on 6th April 2015 as its cost. For commercial or mixed use property or for shares in property rich companies, the valuation date is 6th April 2019. There are, in fact, three ways of calculating your Capital Gains Tax if you are Non-Resident and you are allowed to choose the method which gives you the lowest tax bill!

Improvement costs

Capital improvements that enhanced the asset’s value are generally deductible. Routine maintenance, repairs, and redecoration do not qualify. The improvement must still be reflected in the asset at the time of disposal.

Costs of purchase and sale

Legal fees, estate agent fees, conveyancing costs, and valuation fees paid are all deductible.

Part disposals

Where only part of an asset is sold, the cost is apportioned using the formula: A x B/(B+C), where A is the total cost, B is the proceeds, and C is the market value of the part retained.

Small part disposals of land

You can elect not to treat a small land disposal as a CGT event if proceeds are £20,000 or less and do not exceed 20% of the total land value. Instead, the proceeds are deducted from your base cost for future calculations. This election is unavailable if total land disposal proceeds in the tax year exceed £20,000.

Date of disposal

For property, this is the date on which contracts are exchanged, not completion. For conditional contracts, the disposal takes place on the date on which the conditions are satisfied. For shares, the disposal date is the date the bargain took place, not the settlement date. Note that the 60-day property reporting window runs from completion, not exchange.

Delayed or deferred sale proceeds

Where the full amount is known but payable in instalments – which typically applies to Earn Outs and staged disposals of business interests, it is normally included in full on the disposal date. Where the amount is genuinely uncertain, a provisional figure is used. You can apply to HMRC to pay CGT by instalments where sale proceeds are themselves payable by instalments that begin no earlier than the disposal date, extend over more than 18 months, and continue beyond the tax due date. Again, where you are Non-Resident, Capital Gains Tax does not normally apply on such transactions.

Simple Capital Gains Tax Calculation for Property Sale

A British expat sells a UK buy-to-let property as a higher rate taxpayer:

Sale Price	£450,000
Less: Purchase price and Stamp Duty (say in 2017)	(£280,000)
Less: Improvement costs	(£15,000)
Less: Legal and agent fees (purchase and sale)	(£8,000)
Gross gain	£147,000
Less: Annual CGT allowance	(£3,000)
Chargeable gain	£144,000
CGT at 24% (higher rate)	£34,560

Individual circumstances, including partial residence relief, other gains in the same year, and income level, will affect the actual liability.

Simple Capital Gains Tax Calculation for Share Sale (if Resident)

The same logic applies to a share disposal for a higher rate taxpayer:

Purchase price of shares	£15,000
Sale price of shares	£35,000
Gross gain	£20,000
Less: Annual CGT allowance	(£3,000)
Chargeable gain	£17,000
CGT at 24% (higher rate)	£4,080

A basic rate taxpayer whose combined income and gains stay within the basic rate band would pay 18%, giving a CGT liability of £3,060.

When Do You Pay Capital Gains Tax?

For disposals of interests in UKland and property, you must report and pay within 60 days of completion. All other assets, if you are liable to tax, you must report through Self Assessment by 31 January following the tax year. Tax on a gain in 2025/2026 is due for payment by 31 January 2027.

Am I Liable for UK Capital Gains Tax?

As with most things in tax, the answer is ‘it depends’ – in this case on whether you are resident in the UK or not and what the asset is that you have disposed of.

Residence Status and UK Capital Gains Tax

The Statutory Residence Test applies automatic tests and sufficient ties tests based on days spent in the UK, work duties performed in the UK, the location of your family, and available accommodation in the UK. As a British expat in Singapore, you are likely non-UK resident if you spend fewer than 46 days in the UK, if you meet the conditions to be in Full Time Work Abroad or if you meet the conditions to be Non-Resident under the Sufficient Ties Test.

The Statutory Residence Test is a complex piece of legislation and Spice Taxation can provide full advice to confirm your position and to guide you as to the conditions you must meet in order to become or remain Non-Resident.

Non-UK resident disposals

As mentioned above, non-UK residents pay CGT on the disposal of directly held interests in UK land and property disposals. It also applies where you own the land and property indirectly through a UK or non-UK company, where at least 75% of the gross assets of the company are derived from UK land and property. CGT also applies when a Non-Resident makes a disposal of UK situated trading assets. CGT does not apply to UK shares or other financial assets unless the Temporary Non-Residence rules are triggered on return.

UK Capital Gains Tax on Property (What Expats Need to Know)

UK residential property is the most significant CGT exposure for most expats. Rates are 18% for basic rate taxpayers and 24% for higher rate taxpayers. Principal Private Residence Relief (PPR) may reduce or eliminate CGT where the property was your main home at any point during ownership. The final 9 months of ownership always qualifies for relief. If the property was your main residence throughout, the gain is entirely exempt. Relief for certain periods of ‘deemed occupation’ can also apply. It is best to seek advice.

Reporting and Paying CGT on UK Property When You Live Abroad

Non-UK residents must report and pay CGT on UK property disposals within 60 days of completion through HMRC’s UK Property Account. A Government Gateway account is required or you can file paper forms.

The 60-day deadline applies even where the CGT liability is nil. A return must still be filed.

A late filing penalty of £100 applies automatically. Further penalties of £300 (or 5% of tax due, whichever is greater) apply at six months and twelve months. Interest accrues on unpaid tax from day 61.

UK Capital Gains Tax 5-Year Rule for Temporary Non-Residents

In most cases, if you leave the UK, become non-UK resident, and return within five years, gains made on assets which you owned at the point of departure (excluding UK property which remains liable to CGT at all times) whilst you were Non-Resident become chargeable to UK CGT in the year you return.

For example, let’s assume that you leave the UK having been resident there for at least 4 out of the 7 tax years immediately preceding the tax year of departure and you have a share portfolio which is pregnant with latent gains. You then move to Singapore where you spend the next 4 years before returning to the UK. Whilst living in Singapore you decide to sell the share portfolio and realise handsome gains. You are not liable to tax in the tax year in which you realise those gains. However, because you did not spend five years as a Non-Resident, those gains become taxable in the tax year you resume UK resident status.

If you are planning to return and have made or intend to make significant disposals during your time abroad, the timing matters. If your absence will be shorter than five years, take professional advice before disposing of assets.

One important nuance: assets acquired after you become non-UK resident are not caught by the temporary non-residence rules, even if you return within five years. The rules apply only to gains on assets held at the time of departure.

The five-year period starts from the date on which you become non-resident and expires on the 5th anniversary of that date if you are still Non-Resident at that point.

Am I Eligible for any Capital Gains Tax Reliefs or Allowances?

Yes. Most people with a UK CGT liability are entitled to at least some relief or allowance. The most common are listed below.

CGT Reliefs, Allowances and Exemptions

Reliefs and allowances

Principal Private Residence Relief (PPR): Eliminates or reduces CGT on a property that was your main home during your ownership. Partial relief applies where the property was your main residence for only part of the ownership period and certain periods of deemed occupation can also apply.
Annual Exempt Amount: £3,000 per individual per tax year. The first £3,000 of net gains is free from CGT.
Business Asset Disposal Relief (BADR): Reduces the CGT rate to 18% on qualifying business disposals. Subject to a lifetime limit of £1 million. You must be a sole trader, hold at least 5% of the shares in a trading company or be a partner, and have owned the business asset for at least two years.
Investors’ Relief: Applies the same reduced rate as BADR (currently 18%) to individual investors selling shares in unlisted trading companies. Lifetime limit of £1 million, reduced from £10 million at the October 2024 Budget.
Rollover Relief: Allows CGT on the sale of a business asset to be deferred where the proceeds are reinvested in a qualifying replacement asset within a specified window.
Gift Holdover Relief: Defers CGT on gifts of business assets or gifts into trust until the recipient disposes of the asset.
Capital Loss Relief: Losses in the same tax year are offset against gains before applying the annual allowance. Unused losses can be carried forward indefinitely against future gains.

What is exempt from CGT?

Your main home, subject to Private Residence Relief conditions
Assets held within an ISA or pension
UK Government Bonds and Premium Bonds
Most motor cars
Personal possessions (chattels) worth less than £6,000
Wasting assets with a predictable life of 50 years or less
Gambling and lottery winnings
Transfers between spouses or civil partners who are ‘living together’
Gifts to registered charities
Foreign currency held for personal use
Compensation for personal or professional injury, and some compensation for mis-sold pensions
Life assurance policies held by the original owner or beneficiaries
Company reorganisations and takeovers involving a share-for-share exchange, subject to HMRC authorisation

Tips to Reduce Capital Gains Tax

Transfer assets to a spouse

Transfers between spouses and civil partners are treated as no gain, no loss. Transfer assets to a lower-earning spouse to use their CGT allowance and potentially their Basic Rate band.

Look for tax-efficient ways to invest

Investments within an ISA or pensions are sheltered from CGT and are available for UK residents only. For Non-Residents, Offshore Life Assurance Portfolio Bonds structured in jurisdictions such as Ireland or the Isle of Man allow gains to roll up without CGT on an ongoing basis and such accounts can provide good tax planning optionality if you relocate to the UK.

Increase your pension contributions

Pension contributions reduce your taxable income if you are eligible to make pension contributions and can also increase your Basic Rate band. A contribution that keeps your combined income and gains within the basic rate band reduces CGT from 24% to 18%.

Give to charity

A direct gift of an appreciated asset to a registered charity is exempt from CGT. This eliminates the liability entirely, rather than simply reducing it and, like pension contributions, increases your Basic Rate Band.

Report your losses

Capital losses must be actively claimed. They are not applied automatically. Claims must be made within four years of the end of the tax year in which the loss arose.

Losses arising on the gift of assets to a family member (other than a spouse) or on other people connected to you, such as business partners and trustees, are known as ‘Clogged Losses’. They can only be offset against gains realised upon the transfer of assets to those same persons and cannot be set against other general Capital Gains.

UK Capital Gains Tax Checklist for British Expats

Confirm your residence position under the Statutory Residence Test annually
Identify all UK assets that could give rise to a CGT liability on disposal
Keep full records of acquisition costs, improvement costs, and professional fees for all assets
Check whether any reliefs apply, including Private Residence Relief, Business Asset Disposal Relief, or rollover relief
Use your annual CGT allowance of £3,000 each tax year where possible
For UK residential property, set up a UK Property Account with HMRC in advance of any sale
Report and pay CGT on UK property within 60 days of completion
For other liable assets, report gains through Self Assessment by 31 January following the tax year
Keep records for at least six years after a disposal
If you are planning to return to the UK, consider whether the five-year temporary non-residence rule protects any planned disposals and what disposals are best made whilst Non-Resident
Consider pre-departure planning before relocating from the UK

How do I Report Capital Gains Tax as a Non-Resident?

UK property disposals are reported through HMRC’s UK Property Account. You will need a Government Gateway user ID and password. Register before you need to file, not after.

All other gains are reported through Self Assessment. Non-residents without an existing Self Assessment record may still need to register and file in any year where they have a reportable gain.

If you have never registered for Self Assessment, notify HMRC by 5 October following the tax year in which the gain arose. This allows time for HMRC to issue a Unique Taxpayer Reference before the January deadline.

Keep records of all documentation supporting the gain calculation: original purchase contract, evidence of improvement costs, completion statements, professional fee invoices, and any valuations obtained.

Why Choose Spice Taxation for UK Capital Gains Tax Planning?

UK CGT for expats involves residency rules, non-resident reporting obligations, double tax treaty considerations, and the interaction between your UK and Singapore tax positions. Getting any of these wrong has consequences.

30 years of experience: our practice has been built around UK personal tax obligations for expats and non-residents, including CGT, Self Assessment, and cross-border planning.
Predominantly international client base: over 80% of our clients are based outside the UK, across Singapore, Dubai, Hong Kong, and the wider region. Non-resident CGT is not an edge case for us.
End-to-end planning: CGT does not exist in isolation. A disposal decision can affect your income tax position, pension planning, and IHT exposure. We review the full picture.
Singapore corridor specialism: we work with British expats in Singapore every day, on the specific questions that arise when UK assets are held or disposed of from abroad.

FAQs

Is there CGT on selling UK shares when I live abroad?

Non-UK residents are not subject to UK CGT on the disposal of UK shares, unless they are shares in a ‘property rich’ company. The non-resident CGT regime covers UK land and property, not financial assets. If you return to the UK within five complete tax years of the disposal, the gain may become chargeable under the temporary non-residence rules.

Do I pay CGT on unrealised gains?

No. CGT is only triggered at the point of disposal. Unrealised gains, where the value of an asset has increased but you have not yet sold or disposed of it, are not subject to CGT. A realised gain is one where you have actually sold, gifted, or otherwise disposed of the asset and crystallised the profit. Until that point, no CGT liability arises regardless of how much the asset has increased in value.

Does currency fluctuation affect capital gains tax owed?

Yes. All CGT calculations must be carried out in sterling. Both the acquisition cost and disposal proceeds must be converted at the exchange rate on each respective date. Currency movements can increase or decrease the sterling gain independently of the asset’s performance.

What are the implications of Capital Gains Tax during a divorce?

Transfers between spouses during a marriage are treated as no gain, no loss. From April 2023, separated couples have up to three years following the year of separation to transfer assets on the same basis. This allows time to restructure ownership as part of a financial settlement without triggering CGT.

An investment platform has asked me to pay Capital Gains Tax before they release my funds. What should I do?

Do not pay. HMRC does not instruct investment platforms to withhold funds pending CGT payment. CGT is a self-assessed tax paid directly to HMRC. If you receive a request like this, report it to Action Fraud and contact your platform through its official contact details only.

Where can I get help and support with Capital Gains Tax?

Spice Taxation is based in Singapore and advises British expats across Asia and the Middle East on UK CGT, residency, and HMRC reporting. Contact us to arrange a consultation.

How much does CGT raise every year?

CGT raised £13.3 billion in 2024/25. The OBR estimates £20.3 billion in 2025/26, partly reflecting individuals bringing forward disposals ahead of the October 2024 rate increases. This represents approximately 1.6% of all UK tax receipts, or around £705 per household.

How many people in the UK pay CGT?

348,000 individuals and 21,000 trusts paid CGT in 2022/23, compared to 34.6 million income tax payers. CGT receipts are highly concentrated: 41% of receipts in 2022/23 came from fewer than 1% of CGT taxpayers, those reporting gains of £5 million or more.