If the property has increased in value, you will likely owe Capital Gains Tax in the UK.
BUT... DID YOU KNOW... Two thirds of British expats are unaware that they have UK Capital Gains Tax requirements when they sell a UK property even when living abroad?
Even if you don’t live in the UK, if you are selling a UK residential or commercial property you will still need to pay UK Capital Gains Tax.
Worse still, the process is more complex than when you live in the UK, and getting it wrong can be costly.
Whether you’ve moved abroad recently or been overseas for years, this guide answers the most common questions people have when understanding UK CGT rules and explain why relying on AI tools like ChatGPT or basic online calculators can lead to expensive mistakes.
This article was created to support a Expats Unpacked conversation with Laurence Hodgens in June 2025. You can watch that video below, or on our YouTube channel.
As always, this article is a guide only and must not be relied upon to calculate and report Capital Gains Tax, you must always seek advice from a UK tax specialist to avoid making costly mistakes.
Key points everyone selling a UK property should know before they sell
- You must file a CGT return within 60 days of completion, even if no tax is due.
- Rebasing the original valuation to April 2015 (residential property) or 2019 (commercial property) may reduce your bill, but only if you’ve been non-resident for 5 or more full tax years.
- Your tax residence status matters in the UK and where you live as it determines the tax rules that apply.
- Reliefs like Principal Private Residence (PPR) may be available, even if you live abroad.
- Valuations must be accurate and HMRC-compliant, informal ones can be reviewed and rejected.
- Home improvements may reduce your gain, but only with clear supporting evidence (eg receipts) and only after April 2015 if you are rebasing.
- Your local tax rules could trigger additional tax liability in your country of residence, you will need to review any double tax treaties to avoid paying tax twice.
- AI tools, calculators and online guides (like this one) are limited, seeking expert advice will give you protection against mistakes.
What is Capital Gains Tax and how does it apply to non-residents selling a UK property?
Capital Gains Tax (CGT) is a tax on the profit/gains when you sell a property that has increased in value, once deductions are removed.
Since April 2015, non-UK residents must pay CGT on gains made from selling UK residential and commercial property. This includes:
- British expats living abroad
- Foreign nationals who own UK property
What is the 60-day CGT reporting deadline?
When you sell a UK property as a non-resident, you must file a CGT return within 60 days of completion. Penalties apply automatically even if no tax is due, and the process of amending can be slow and arduous – it’s much better to not file late.
With increasing data sharing between governments around the world, HMRC will find out and will likely send you a nudge letter to get you to file your CGT plus any penalties and interest.
What is “rebasing” and how can it reduce my CGT liability?
Rebasing is the process of determining a valuation of a property that was purchased before April 2015. Essentially it allows you to calculate your gain based on your property’s value as at:
- 5 April 2015 (residential property)
- 6 April 2019 (commercial property)
You will be eligible to rebase the value of your property if you’ve been non-resident for five full tax years before the sale. Becoming a UK tax resident within five years of the sale can revoke this benefit.
What is straight-line apportionment, and when should it be used instead of rebasing?
Most non-residents selling UK property originally purchased before April 2015 will tend to rebase their property's value to April 2015 or 2019. However, that’s not always the most tax-efficient approach.
If you’ve owned your property for a long time, say since the 1990s, and property values peaked around 2015, you might find that the rebased gain is still quite large. In such cases, a straight-line apportionment method may be preferable.
What straight-line apportionment?
Straight-line apportionment divides the property's total gain across the entire period of ownership and applies tax only to the proportion of time after 6 April 2015 (for residential) or 6 April 2019 (for commercial). If your property saw most of its value increase before those dates, apportionment may offer a much lower gain than rebasing.
This approach requires careful analysis, and it’s something AI platforms and online tools rarely suggest. A qualified adviser can run the necessary comparisons and select the method that offers the lowest tax exposure based on your unique circumstances.
How do I get a valuation for my UK property for rebasing?
Valuations must be dated to the correct rebasing threshold and be HMRC-compliant. RICS surveyors, Hometrack reports, and Rightmove data are acceptable sources. Guessing is not acceptable.
Why is it important to use the correct valuation method?
If you're relying on a rebased valuation, then accuracy is critical. But not all valuations are accurate and not all RICS surveyors deliver reports that meet HMRC expectations.
In one example, a New Zealand client obtained a RICS valuation online, only to find it was full of errors, including the wrong date, which made it unusable. He then had to commission a second valuation, compare it to Hometrack data, and cross-reference with Rightmove sale prices in the local area to establish a credible figure.
Checklist for getting a reliable valuation:
- Use a RICS-registered surveyor familiar with UK CGT requirements.
- Check the valuation date is exactly 5 April 2015 (or 6 April 2019 for commercial).
- Compare against online tools like Hometrack and Land Registry data for supporting evidence.
- Review similar properties sold on RightMove.
Can I still claim Principal Private Residence (PPR) relief from abroad?
PPR relief may still apply if the property was your main residence at some point, which could include:
- Time lived in the property
- Final nine months of ownership
- Up to three years of absence
- Overseas work periods
Spending 91+ days per year in the property may also help maintain eligibility.
What happens if one owner is a UK tax resident and the other is not?
Each owner’s CGT liability is assessed individually. Mixed residency can complicate matters, and eligibility for reliefs may vary as a result. You must seek professional advice if this is your situation.
How do I know if I’m a UK tax resident or not?
UK tax residence status is determined by the Statutory Residence Test (SRT). The SRT looks at a number of factors including:
Getting this wrong will affect your UK tax liability and potentially cause compliance issues.
Will I have to pay tax in the country I live in?
Potentially, yes. For example, Australia tax foreign property sales. It is important to know the local rules and check any double taxation treaties between the UK and your country of residence. Local rules can add complexity or offer credits against UK tax paid. On most occasions, you will not be the victim of double tax.
Can I deduct home improvements from my CGT bill?
Potentially, providing the improvements were carried out after April 2015. Only capital improvements like extensions or loft conversions are deductible, routine maintenance is not.
You must also keep clear records and receipts, so any work carried out “cash in hand” and without a receipt will not be deductible.
Can I deduct tax advice from my CGT bill?
No, however you must still incorporate getting formal advice into your decision making and financial plans.
When should I start thinking about Capital Gains Tax if I plan to sell in the future?
Technically, this is impossible to answer as it is never too soon to plan for your CGT bill, it should be incorporated into all decision making. However, the latest suggested time to start planning for CGT is before you put your property on the market.
Many non-residents make the mistake of waiting until the sale has completed, or even until the 60-day deadline is looming, before considering their CGT position.
By then, options like Principal Private Residence (PPR) relief, rebasing eligibility, or even ownership restructuring may no longer be available.
For example, spending 91 days per tax year in your UK property, if you're still eligible, could preserve PPR relief in future. Similarly, ensuring you've been non-resident for at least five full tax years can unlock rebasing benefits that significantly reduce your CGT bill.
To minimise any CGT liability (and avoiding costly errors), it is recommended to plan as far in advance as possible by getting trusted advice from a UK tax specialist.
Other frequently asked questions about selling a UK property when living abroad
Can ChatGPT accurately calculate CGT for me?
Not really, no. It can provide a rough estimate, but only a qualified tax adviser can factor in residence status, PPR (and other) relief, rebasing, and international tax implications to get a true CGT figure.
What if I miss the 60-day deadline?
Automatic penalties apply, filing late could result in fines even if no tax is owed.
How do I know if I qualify for rebasing?
You must be non-resident for five full tax years before selling.
Don’t leave tax to chance, get help with CGT as a non-resident
Navigating UK tax rules from abroad is never simple. AI can help with general research — but only an expert can safeguard your money and peace of mind.
We offer a free introduction service connecting you with UK tax specialists who understand the unique challenges faced by non-residents.