Capital Gains Tax for UK Expats: The Complete Guide

The assumption that leaving the UK eliminates UK capital gains tax is dangerously wrong for many expats. UK CGT has a long reach for non-residents — particularly on UK real property — and the temporary non-residence anti-avoidance rules mean that gains realised while abroad can be brought back into the UK tax net on return.

This guide covers every aspect of UK CGT that applies to non-UK residents: the scope of the charge on UK property; the temporary non-residence rules; the 60-day reporting requirement; private residence relief for non-residents; and the emerging position on crypto assets and overseas assets.

The General Non-Resident CGT Position

The starting point is that non-UK residents are generally not subject to UK CGT. A non-resident who holds a portfolio of UK-listed shares, UK corporate bonds, or UK cash deposits can sell those assets without a UK CGT liability — the gains arise outside the UK tax net.

However, there are important exceptions.

Exception 1: UK Residential Property

Since 6 April 2015, non-UK residents have been subject to UK CGT on disposals of UK residential property. This was the first significant extension of UK CGT to non-residents and was introduced to address concerns about overseas investors holding UK property free of tax on gains.

What is covered: Any UK residential property — houses, flats, buy-to-let properties, holiday homes, and dwellings under construction. The property must be in the UK; overseas residential property owned by non-residents is not within this charge.

The cost base: For properties acquired before 5 April 2015, the gain is calculated from 5 April 2015 (rebasing). Alternatively, the taxpayer can elect for straight-line time apportionment, or use actual historical cost. The choice of method can significantly affect the taxable gain.

CGT rates: Non-UK residents pay UK CGT on residential property at 18% (basic rate) or 24% (higher rate), depending on their total UK income plus gains position in the relevant year.

The annual exempt amount: Non-UK residents may be entitled to the UK annual exempt amount (currently £3,000 for 2026/27) — but only if they are also entitled to personal tax allowances (broadly, if they are UK nationals, EEA nationals, or residents in a treaty country that grants this entitlement). Check your position before assuming the exemption applies.

Exception 2: UK Commercial Property and "Property-Rich" Companies

Since 6 April 2019, non-UK residents are also subject to UK CGT on:

• Disposals of UK commercial property (shops, offices, warehouses, industrial units)
• Disposals of interests in entities that are "UK property rich" — meaning 75% or more of their gross asset value derives from UK land at the time of disposal

The UK property-rich company rule captures offshore holding structures used to hold UK commercial real estate. A non-resident selling shares in an offshore company that holds UK commercial property is subject to UK CGT as if they had sold the property directly — unless there are genuine commercial reasons for the structure and various exemptions apply (notably, the "widely held" exemption for large publicly listed funds).

Exception 3: Temporary Non-Residence

The temporary non-residence (TNR) rules are among the most important anti-avoidance provisions for internationally mobile individuals. They are designed to prevent the following strategy: leave the UK; realise large gains while non-resident (free of UK CGT); return to the UK.

How TNR works: If you cease to be UK-resident and subsequently return to the UK within five complete tax years of your departure year, certain gains you realised while non-resident are treated as arising in the year of your return and taxed at that point.

The gains caught by TNR are those arising on assets you held at the time of departure. Assets acquired and disposed of entirely during the period of non-residence are NOT caught — this only applies to assets you already owned when you left.

Five complete tax years: This means five full tax years between departure and return — the year of departure and the year of return do not count. If you left on 1 June 2023, the five-year clock starts from 6 April 2024 (the first full tax year of non-residence). You must remain non-resident until 5 April 2029 for the TNR rules not to apply on return.

Practical planning: Those planning to leave the UK who hold significant assets with built-in gains should consider the TNR rules carefully. If you sell before you leave, the gain is within the UK tax net (you are still UK-resident at that point). If you sell immediately after leaving and return within five years, the gain is still within the UK tax net (TNR rules apply). You must either sell the asset before departure and accept UK CGT, or genuinely remain non-resident for five complete tax years after disposal.

EIS CGT deferral and TNR: An important interaction: deferred gains under EIS deferral relief crystallise on disposal of the EIS shares. If this crystallisation occurs while you are non-resident, the TNR rules may bring that gain back into charge on return. See the VCT and EIS guide for more detail.

The 60-Day Reporting Requirement

Since 27 October 2021, any person (UK resident or non-resident) who disposes of a UK residential property and has a UK CGT liability must:

1. Report the disposal to HMRC using the UK Property Reporting Service
2. Pay the estimated CGT due

— within 60 days of completion (the transfer of legal title).

This is separate from self-assessment. Even if you file a UK self-assessment return annually, you must still comply with the 60-day rule and make a payment on account of CGT by day 60. Any over- or underpayment is reconciled through your annual self-assessment return.

For non-UK residents: The 60-day rule applies even if you have no other UK tax obligations. Non-UK residents with no UK income and no UK self-assessment obligation must still register with HMRC (if not already registered) and report within 60 days of completion.

Penalties: A fixed £100 penalty applies for filing up to three months late. A further £300 (or 5% of tax due, if greater) applies at six months. Additional penalties apply at 12 months. HMRC cross-references Land Registry completion data — late filers are identified.

What counts as "completion": The disposal occurs on the date of legal completion — when the property is conveyed and the buyer takes legal title. This is not the date of exchange of contracts. Solicitors should be briefed in advance to notify you of the completion date so the 60-day clock can be tracked.

Private Residence Relief for Non-UK Residents

Private Residence Relief (PRR) exempts a gain on the disposal of a property that was your main residence during the period of ownership. For non-UK residents, PRR is available — but only under a more demanding condition:

The 90-night test: A non-UK resident can claim PRR for a UK property for a particular tax year only if they (or their spouse or civil partner) spent at least 90 nights in that property during that tax year.

This is a considerably higher bar than the rule for UK residents, where any genuine period of occupation as a principal residence qualifies. For a non-UK resident who owns a UK property but uses it only occasionally as a holiday home, PRR will not be available unless they can demonstrate 90+ nights of use.

PRR for non-residents also applies to overseas properties — a non-UK resident with a principal home abroad may claim PRR for that overseas property, provided the 90-night test is met, on a disposal that would otherwise be within the non-resident CGT net (which generally it would not be, unless it is UK property).

Crypto Assets and Non-Residents

HMRC's position, set out in the Cryptoassets Manual, is that cryptoassets are situated where the beneficial owner is resident. This means that if you are non-UK resident when you dispose of cryptoassets, UK CGT should not apply — the asset is treated as being outside the UK.

This is a policy position, not a statutory provision, and HMRC's guidance could evolve as the regulatory and legislative framework for digital assets develops. There are also open questions about:

• Assets held on UK-based exchanges — does the location of the exchange affect the situs of the asset?
• UK-domiciled non-residents — for whom the old remittance basis previously provided some relief
• NFTs and other novel digital assets with potentially different characteristics

Individuals with significant cryptoasset gains should take specialist advice before assuming complete freedom from UK CGT on disposal while non-resident.

US Persons Abroad: An Important Distinction

American citizens and long-term permanent residents (Green Card holders) are taxed by the United States on their worldwide income and gains regardless of where they live. There is no "non-resident CGT exemption" equivalent for US persons — the US taxes gains on all assets, wherever located, at all times.

US persons living outside the US therefore face a dual taxation challenge: local country CGT (if applicable) and US federal CGT — with treaty relief providing partial but not always complete elimination of double taxation. If you are a US person living abroad, specialist US and UK (or local country) tax advice is essential.

How Global Investments Can Help

CGT planning for non-UK residents requires careful analysis: the nature of the assets, the timing of disposals relative to residence status changes, the five-year TNR window, and the 60-day reporting obligation for UK property. Global Investments works with internationally mobile clients to review their asset base, model the tax impact of disposals in different scenarios, and ensure all reporting obligations are met on time. If you are considering selling assets while abroad, or are planning your departure from or return to the UK, please speak with one of our advisers before transacting.