Selling UK Property as an Expat? The Capital Gains Tax You Can’t Ignore

If you’re an Australian who picked up a flat in London during a working stint, or a Brit-turned-Aussie still holding property back in the old country, here’s a fact that catches people flat-footed: selling UK property can trigger UK capital gains tax even if you haven’t set foot in Britain for years.

For a long time there was a handy loophole. Non-residents could sell UK property and dodge UK CGT entirely. That door shut years ago, and the rules have only tightened since. So before you sell, here’s what you need to know, with the honest caveat up front that this is UK tax law, and the genuinely valuable part for you is how it collides with your Australian tax. More on that at the end.

The loophole that closed (and stayed closed)

Until 2015, non-residents could generally sell UK residential property without paying UK CGT. Then the UK introduced non-resident capital gains tax on residential property from April 2015, and extended it from April 2019 to cover UK commercial property and land, and even indirect disposals (like selling shares in a company that’s rich in UK property).

The upshot: if you’re a non-resident selling UK property today, UK CGT is firmly on the table. The old “live overseas for a year and sell tax-free” trick is dead and buried.

What you’ll actually pay

Here’s where the old guides are out of date. For UK residential property, the current CGT rates for individuals are 18% on the portion of the gain falling within the UK basic-rate band and 24% above it. (If you’ve read that the top rate is 28%, that’s stale; it was cut to 24% from April 2024.) Non-residential property and other assets now sit at the same 18% and 24%.

You also get a tax-free annual exempt amount, but don’t get excited: it’s been slashed to just £3,000 per person for 2025/26, down from £12,300 just a few years ago. Spouses who jointly own can use one each. It’s a shadow of what it was.

The reliefs and the rebasing that can save you

A few things can genuinely reduce the bill. If the property was once your main home, Private Residence Relief may exempt the period you actually lived there, plus the final nine months of ownership, though it gets fiddly for non-residents and is worth proper advice before you claim it.

And here’s a valuable one for long-term owners: as a non-resident selling residential property, you can generally “rebase” the property’s cost to its market value at April 2015, meaning only the growth since then is caught (rather than the gain all the way back to when you bought it). For a property bought cheaply decades ago, that rebasing can dramatically cut the taxable gain. So digging out (or obtaining) an April 2015 valuation is genuinely worth the effort.

The deadline that trips everyone: 60 days

This is the trap that catches the unwary, so read it twice. If you sell UK residential property at a taxable gain, you must report it and pay the CGT within 60 days of completion, through HMRC’s dedicated “Capital Gains Tax on UK property” online service. That’s separate from any annual tax return, and the clock is brutally short. Miss it and HMRC hands out automatic penalties.

Sixty days is not long when you’re juggling a property sale from the other side of the world, so line up your valuation, your figures and your reporting before completion, not after.

A note on the “five-year” point

You may have heard that being non-resident for five years or more changes things. That relates to the UK’s temporary non-residence rules, which can claw certain gains back into UK tax if you leave and return within roughly five years. It mainly affects assets other than UK land (UK property is caught by the non-resident rules regardless), and it’s genuinely technical. The practical message: your length and pattern of residence matters, keep good records of your time in and out of the UK, and don’t assume a simple “five-year rule” saves you on property, because for UK land it generally doesn’t.

The bit that’s actually our department: the Australian side

Here’s why this lands on an Australian expat tax site. If you’re an Australian tax resident when you sell that UK property, the gain doesn’t just concern HMRC, it’s also assessable in Australia, because Australian residents are taxed on worldwide income and gains. The good news is you won’t generally be taxed twice on the same gain: a foreign income tax offset gives you credit for the UK CGT you’ve paid against your Australian tax on the same gain.

But the two systems don’t line up neatly. They calculate the gain differently, they run on different tax years (the UK’s April-to-April versus Australia’s July-to-June), and Australia may apply its own CGT discount rules and cost base while the UK applies its rebasing. Squaring all that so you claim the right offset and don’t overpay either revenue office is fiddly, specialist work, and it’s exactly where we come in. We’ll leave the UK return to a UK adviser, but the Australian side, and making the two talk to each other, is ours.

The bottom line

Selling UK property as a non-resident means UK CGT at 18% or 24%, a tiny £3,000 tax-free amount, a strict 60-day reporting deadline, and some genuine relief through April 2015 rebasing and Private Residence Relief if you qualify. And if you’re an Australian resident, the same gain has to be squared with the ATO too, with a credit for the UK tax paid. Plan it before you sell, get the valuations sorted early, and get both sides of the Tasman, or rather both ends of the globe, talking.

Tread your own path. Just count the tax on both sides of it before you sell.

Selling UK property and not sure how it hits your Australian tax?

The UK side has its own advisers, but the moment that UK gain has to appear on your Australian return, with the right foreign income tax offset and the two systems reconciled, that’s our patch. Get it right and you avoid double tax and nasty surprises; get it wrong and you can easily overpay one revenue office or the other.

Our specialist expatriate tax team handles exactly this kind of cross-border puzzle for Australians the world over, entirely remotely.

Book an appointment with our expat tax specialists today, ideally before you sell. A short chat now can save a world of bother later.

General information only. This article concerns UK and cross-border tax, doesn’t consider your personal circumstances, and isn’t tax or financial advice. UK tax rules and rates change frequently and are administered by HMRC. Speak to our specialist expatriate tax team about the Australian side, a suitably qualified UK adviser about the UK side, or another registered tax agent, before acting.

References

1. HM Revenue & Customs, “Capital Gains Tax: what you pay it on, rates and allowances” (the 18% and 24% residential property rates and the £3,000 annual exempt amount for 2025/26): gov.uk
2. HM Revenue & Customs, “Tax when you sell property: report and pay Capital Gains Tax” (the 60-day reporting and payment deadline via the CGT on UK property service): gov.uk
3. HM Revenue & Customs, “Capital Gains Tax for non-residents: UK property and land” (the non-resident CGT regime, scope from April 2015 and April 2019, and rebasing to April 2015 value): gov.uk
4. HM Revenue & Customs, “Tax on foreign income: UK residence and tax” (temporary non-residence rules): gov.uk
5. Australian Taxation Office, “Foreign income tax offset” (credit for foreign tax paid against Australian tax on the same income or gain): ato.gov.au