Selling overseas property

As a general rule, if you are resident in the UK, you are liable to pay Capital Gains Tax (CGT) when you sell (or dispose of) an overseas property at a gain.

The annual exempt amount applicable to CGT was reduced to £6,000 (from £12,300) for the current 2023-24 tax year. CGT is normally charged at a simple flat rate of 20% and this applies to most chargeable gains made by individuals. If taxpayers only pay basic rate tax and make a small capital gain, they may only be subject to a reduced rate of 10%. Once the total of taxable income and gains exceed the higher rate threshold, the excess will be subject to 20% CGT.

A higher rate of CGT applies to gains on the disposal of residential property (apart from a principal private residence). The rates are 18% for basic rate taxpayers and 28% for higher rate taxpayers.

You may also have to pay tax in the country where the overseas property was located. If you are subject to paying double taxation, there may be reliefs available depending on what tax agreements are in place with the UK and the country where you made the taxable gain. There is also additional guidance available for dual residents.

There are special rules if you are resident in the UK, but your permanent home or domicile is abroad.