Capital Gains Tax (CGT) for British Expats Investing in UK Property: How Much Will You Pay?

If you’re a British expat investing in UK property, you’re probably familiar with the usual suspects: Stamp Duty, mortgage rates, rental yields—all the fun stuff. But what happens when you sell your property and (hopefully) make a nice profit?

That’s where Capital Gains Tax (CGT) comes in. The UK government wants its share of your hard-earned gains, and as an expat, the rules are slightly different for you.

So, how much Capital Gains Tax will you pay as a British expat? And does it make a difference if you own the property in your personal name or through a limited company? Let’s break it all down.

What is Capital Gains Tax (CGT)?

Capital Gains Tax is a tax you pay on the profit (or “gain”) you make when selling a property that’s not your main home—such as a buy-to-let investment or a second home. It’s calculated on the difference between:

Selling Price – Purchase Price = Taxable Gain

Of course, it’s never quite that simple (this is UK tax we’re talking about). There are allowances, deductions, and different rates depending on how you own the property.

Do British Expats Have to Pay Capital Gains Tax?

Yes. Even if you’re living overseas, you’re still liable for CGT when selling UK property. Since April 2015, non-residents (including British expats) must pay CGT on UK residential property gains.

But there’s a slight silver lining: CGT is only charged on the gain made from April 2015 onwards. If you bought your property before then, you may be able to use its market value from April 2015 as your starting point instead of the original purchase price.

Capital Gains Tax Rates for Expats (Personal Ownership vs Ltd Company)

The amount of CGT you pay depends on whether you own the property in your personal name or through a UK limited company.

1. If You Own the Property in Your Personal Name

Capital Gains Tax rates depend on your UK income tax band:

Taxpayer Type Capital Gains Tax Rate on Property

• Basic Rate (Income up to £50,270) 18%

• Higher/Additional Rate (Income above £50,270) 24%

Most expats investing in UK property fall into the higher-rate tax bracket, meaning you’ll likely pay 24% CGT on your gain.

Example: Personal Ownership CGT Calculation

Let’s say you bought a buy-to-let property in 2016 for £250,000 and sell it in 2025 for £400,000. Your taxable gain is: £400,000 – £250,000 = £150,000

You can deduct your Capital Gains Tax Allowance (£3,000 in 2024/25), so your taxable gain is: £150,000 – £3,000 = £147,000

If you’re a higher-rate taxpayer, your CGT bill will be: £147,000 x 24% = £35,280

Ouch.

2. If You Own the Property Through a Limited Company

If you purchase property via a UK Ltd company, you don’t pay Capital Gains Tax. Instead, you pay Corporation Tax on the profit, which is currently 25% (as of Feb 2025).

But there’s an advantage: Companies can deduct more expenses than individuals, such as mortgage interest, legal fees, and even some refurbishment costs. This can lower your taxable profit before tax is applied.

Example: Ltd Company CGT Calculation

Let’s take the same example as before:

• Bought for £250,000

• Sold for £400,000

• Gain: £150,000

Now, let’s say your company deducts £20,000 in allowable expenses (legal fees, refurbishments, etc.), bringing your taxable profit to:

£150,000 – £20,000 = £130,000

Corporation Tax (25%) = £32,500

Comparison:

• Personal Ownership CGT: £35,280

• Ltd Company Corporation Tax: £32,500

Not a huge difference at first glance, but if you plan to reinvest your profits into more properties, keeping them in a Ltd company can be much more tax-efficient.

Can You Reduce Your Capital Gains Tax as a British Expat?

There are a few legitimate ways to reduce your CGT bill:

1. Use Your CGT Allowance

Every UK taxpayer gets a £3,000 CGT allowance (as of 2024/25), meaning the first £3,000 of your gain is tax-free.

2. Offset Allowable Expenses

You can deduct certain costs before calculating your taxable gain, such as:

✅ Stamp Duty and legal fees from when you bought the property

✅ Estate agent and solicitor fees when selling

✅ Renovation costs (but only for capital improvements, not general maintenance)

3. Transfer Property to a Spouse

If you’re married and your spouse pays a lower rate of tax, you can transfer part or all of the property to them before selling. This could lower the CGT rate to 18% instead of 24%.

4. Sell in a Low-Income Year

If you plan to retire or take a career break, selling the property in a year when your income is lower could push you into the 18% tax bracket instead of 24%.

5. Buy Through a Ltd Company (If Building a Portfolio)

If you plan to scale up and reinvest your profits, buying through a limited company may be more tax-efficient than owning properties personally.

Final Thoughts: What’s the Best CGT Strategy for British Expats?

If you’re a casual investor (owning just one or two properties), buying in your personal name is usually fine—just be aware of the 24% CGT hit when selling.

If you’re building a portfolio and plan to reinvest profits, using a Ltd company could be the smarter route. The ability to deduct expenses and avoid personal CGT means you’ll likely pay less tax overall.

Important point: The above is not financial or tax advice. Do not take our word for it, make sure you speak to a tax specialist to get advice for your specific situation.

Still not sure what’s best for you? That’s where we come in.

Need Help Structuring Your UK Property Investment?

At Expat Property Investments, we specialise in helping British expats invest in UK property the right way—maximising profits while minimising tax burdens.

Want personalised advice on Capital Gains Tax, mortgage structuring, or the best investment strategy for your situation?

Book a FREE 30-minute consultation call with us today here. Let’s make your UK property investment as tax-efficient (and stress-free) as possible.