CGT on Overseas Property for UK Residents: FX Base Cost, SA108 and Treaty Relief (2026/27)

UK tax residents pay CGT on worldwide gains under TCGA 1992 s.1(1), including property located overseas. Two points catch most people: first, each amount in the computation converts to sterling at the spot rate on its own transaction date (Bentley v Pike [1981] 53 TC 590; HMRC CG78310), not a single conversion of the net gain; second, the 60-day UK property return does not apply to overseas disposals at all. You report on SA108 and the foreign supplementary pages (SA106) by 31 January after the tax year of sale. Foreign tax already paid on the same gain is creditable under TIOPA 2010, capped at the lower of the foreign tax and the UK CGT attributable to that gain.

This page is for UK tax residents who own property located outside the UK and are considering selling it, or who have recently sold. This is the opposite situation from a non-UK resident selling UK property. If you are a non-UK resident selling a UK property, see our non-resident CGT guide instead as completely different rules apply.

The technical content most readers miss: the FX conversion rule that requires two different spot rates (one for purchase, one for sale), the 60-day non-application, and how Foreign Tax Credit Relief under TIOPA 2010 interacts with a UK CGT bill. This guide covers all three, with a worked example based on a Spanish apartment disposal, and a clear reporting roadmap via SA108 and the foreign supplementary pages.

For the broader CGT framework, see our CGT on property: complete guide.

When UK CGT applies to overseas property

UK tax residents are subject to capital gains tax on worldwide gains. This is the basic rule under TCGA 1992 s.1(1). If you are UK tax resident in the year you sell an overseas property, the gain falls within the UK CGT net regardless of where the property is located, what currency the transaction is in, or whether the overseas country has also charged its own CGT on the same gain.

The UK residence test that determines whether you are within scope is the Statutory Residence Test (SRT) introduced by Finance Act 2013. If you pass the SRT as UK resident in the tax year of disposal, your worldwide gains are taxable in the UK.

Common examples that catch people out:

• A Spanish or French holiday home owned for many years and sold during a period of UK residence
• An inherited apartment in Portugal, Dubai, or the USA sold after probate is complete
• A buy-to-let property purchased overseas and later sold at a profit
• A main home in another country sold after the owner returned to the UK

In all these cases, UK CGT applies. The fact that the overseas country has also taxed the gain does not eliminate the UK charge. Instead, Foreign Tax Credit Relief (covered below) prevents genuine double taxation by giving a credit for the overseas tax paid.

Calculating the gain: allowable expenditure

The gain is calculated using the same framework as for UK property under TCGA 1992 s.38 and s.41, which apply equally to overseas assets.

The gain is broadly:

Disposal proceeds minus acquisition cost minus allowable expenditure

Allowable expenditure includes:

• The original purchase price (including any purchase taxes such as transfer tax or stamp duty paid in the overseas country)
• Legal and professional fees on acquisition
• Enhancement expenditure (capital improvements to the property, not repairs)
• Incidental costs of disposal (estate agent or notary fees, legal fees on the sale)

Revenue repairs and maintenance are not allowable for CGT purposes (though they may be deductible against rental income if the property was let). Enhancement expenditure must be capital in nature and still reflected in the state of the property at disposal.

FX conversion: the rule that trips up most computations

Because the transaction is in a foreign currency, every figure in the CGT computation must be converted to sterling before the gain can be computed. The rule on how to do this conversion is one of the most misunderstood points in overseas property CGT.

The correct rule: each amount converts to sterling at the exchange rate on the date that amount was incurred or received. This is established by two cases confirmed by HMRC at CG78310:

• Bentley v Pike [1981] 53 TC 590: each foreign-currency amount converts at the spot rate on the transaction date.
• Capcount Trading v Evans [1992] 65 TC 545: confirmed Bentley v Pike; the gain must not be computed in foreign currency and then converted at a single rate.

In practice this means:

• Acquisition cost: convert at the spot rate on the date of completion of the purchase
• Enhancement costs: convert each item at the spot rate on the date it was paid
• Disposal proceeds: convert at the spot rate on the date of completion of the sale
• Incidental disposal costs: convert at the spot rate on the date each cost was paid

The critical consequence: the sterling gain is almost always different from the foreign-currency gain expressed at a single rate. If sterling weakened against the foreign currency between your purchase and sale, the sterling gain will be higher than the gain measured purely in the overseas currency. This embedded FX component is fully taxable. There is no FX exemption.

Worked example: Spanish apartment disposal with FTCR

Marcus is a UK tax resident. He bought a Spanish apartment in June 2015 for EUR 200,000. He sold it in September 2026 for EUR 320,000. He paid estate agent fees in Spain of EUR 9,600.

Exchange rates (illustrative spot rates):

• June 2015 (acquisition): EUR 1.40 = GBP 1.00 (so EUR 200,000 = GBP 142,857)
• September 2026 (disposal): EUR 1.18 = GBP 1.00 (so EUR 1 = GBP 0.847)

Spanish CGT paid: EUR 16,000 (= GBP 13,559 at the September 2026 disposal-date rate).

Step 1: convert each amount at its own transaction-date spot rate

Amount	EUR	Rate (EUR per GBP)	GBP
Acquisition cost (June 2015)	200,000	1.40	142,857
Disposal proceeds (September 2026)	320,000	1.18	271,186
Incidental disposal costs (September 2026)	9,600	1.18	8,136

Step 2: compute the sterling gain

Item	GBP
Disposal proceeds	271,186
Less: incidental costs of disposal	(8,136)
Net proceeds	263,050
Less: acquisition cost	(142,857)
Gross gain	120,193

Note: the sterling gain (GBP 120,193) is higher than the EUR gain expressed at a single disposal-date rate. The EUR gain is EUR 110,400 (320,000 minus 200,000 minus 9,600). At the disposal-date rate, that is GBP 93,559. The difference of GBP 26,634 is the FX component, arising because sterling weakened against the euro between 2015 and 2026. This FX uplift is fully taxable.

Step 3: apply reliefs

• Private Residence Relief: Marcus never occupied this as his main residence, so no PPR applies.
• Annual Exempt Amount (2026/27): GBP 3,000.
• Chargeable gain: 120,193 minus 3,000 = GBP 117,193.
• Marcus is a higher-rate taxpayer. UK CGT at 24%: 117,193 x 24% = GBP 28,126.

Step 4: Foreign Tax Credit Relief under TIOPA 2010

• Spanish tax paid: EUR 16,000 = GBP 13,559 (at disposal-date rate).
• UK CGT on the same gain: GBP 28,126.
• FTCR = the lower of (a) GBP 13,559 and (b) GBP 28,126.
• FTCR = GBP 13,559 (foreign tax is lower; full credit given).
• Net UK CGT payable: GBP 28,126 minus GBP 13,559 = GBP 14,567.

Step 5: reporting path

The disposal is reported on SA108 and the foreign supplementary pages (SA106) in the annual Self Assessment return. The 60-day UK property return does not apply (it applies only to UK land). The deadline for Marcus is 31 January 2028 (31 January following the end of the 2026/27 tax year).

Annual Exempt Amount

For 2024/25 onwards, the Annual Exempt Amount (AEA) is GBP 3,000 per individual per tax year. It is deducted from the total chargeable gains before tax is calculated. Where overseas disposals are combined with UK disposals in the same tax year, all gains and losses are pooled together first, then the AEA is applied once to the net result.

Spouses and civil partners each have their own AEA. Transfers between spouses are at no gain/no loss for CGT, so restructuring ownership between spouses before a disposal can, in some cases, use both AEAs and reduce the combined liability.

CGT rates on overseas property (2026/27)

For the 2026/27 tax year, CGT rates depend on whether the asset is residential property and whether the gain falls within the basic-rate income tax band:

Taxpayer position	Residential property rate	Non-residential rate
Basic-rate band (portion within band)	18%	18%
Higher or additional rate (or portion above band)	24%	24%
Trustees and personal representatives	24%	24%

From 6 April 2026, the residential property rates (18%/24%) are the same as the rates for other assets. There is no longer a differential between residential and non-residential CGT rates for individuals.

The gain is added on top of taxable income to determine which rate band(s) apply. The annual income tax bands are used for this stacking calculation. Overseas property that was a holiday home or investment property will almost always fall at 18% or 24% (or a split between the two) depending on the taxpayer's income in the year of disposal.

Foreign Tax Credit Relief under TIOPA 2010

Where the overseas country has charged its own CGT (or equivalent) on the gain, the UK gives credit for that foreign tax under the Foreign Tax Credit Relief (FTCR) regime. The statutory basis is TIOPA 2010 Part 2.

Key rules:

• Credit method, not exemption: almost all UK double taxation agreements use the credit method for property gains (following OECD Model Article 13). The UK does not simply exempt the gain. It taxes the gain at full UK CGT rates and gives a credit for the foreign tax paid. Agreements that use the exemption method for property are extremely rare.
• The cap: the credit is capped at the UK CGT attributable to the same gain. If the overseas tax rate is higher than the UK rate, the excess foreign tax above the UK liability cannot be credited, deducted, or carried forward. The net UK liability is reduced to nil, but no refund or excess arises.
• Pound-for-pound offset: FTCR reduces the UK CGT bill directly, not the gain. It is not a deduction from the taxable gain.
• Same gain requirement: the credit applies to foreign tax charged on the same gain as the one giving rise to the UK CGT liability. Where the overseas country uses a different base (for example, a different base date or rebased value), care is needed in matching the UK and overseas computations.

FTCR is claimed on SA108 and SA106. HMRC Helpsheet HS261 (Foreign Tax Credit Relief) sets out the mechanics and the claim form.

How to report: SA108 and foreign pages (not the 60-day return)

This is one of the most common errors made by UK residents selling overseas property: assuming the 60-day UK property return applies.

The 60-day return (introduced by Finance Act 2019 Schedule 2) applies only to disposals of UK land. It does not apply to overseas property, even where the seller is UK resident and UK CGT is due. There is no separate reporting obligation for overseas property disposals within 60 days.

Reporting route	When it applies	Deadline
60-day UK property return	UK land disposed of by UK resident, where tax is due	60 days from completion
Annual Self Assessment (SA108 + SA106)	Overseas property disposal by UK resident	31 January following the tax year
Annual Self Assessment (SA108 only)	UK property disposal where no tax is due (e.g. covered by AEA or losses)	31 January following the tax year

For an overseas property sale in the 2026/27 tax year (6 April 2026 to 5 April 2027), the filing deadline is 31 January 2028. Interest accrues from 31 January on any unpaid balance. Standard Self Assessment late-filing penalties (not the property-specific 60-day penalty regime) apply if the return is filed late.

Private Residence Relief on overseas property

Private Residence Relief (PRR) under TCGA 1992 s.222 is available on overseas property where the property was your only or main residence during the ownership period. There is no statutory restriction to UK property. An overseas property qualifies if it was in fact your main home.

The standard PRR rules apply:

• The gain attributable to the period of actual occupation as main residence is fully relieved.
• The final 9 months of ownership are treated as main residence regardless of actual occupation (the final-period allowance).
• Where you own more than one residence, you must nominate which one is to be treated as the main residence. The nomination is made to HMRC within 2 years of acquiring the second property.
• Periods of letting (where the property was let after a period of main residence) may attract letting relief in limited circumstances under s.223(4), though the availability of letting relief was significantly restricted by Finance Act 2020.

Practical note: if you bought an overseas property as a holiday home or investment, PPR does not apply for those periods, even if you spent time there. It requires occupation as your main residence. Occasional use of a holiday home does not qualify.

PPR eliminates UK CGT on the qualifying period, and nothing more. The overseas country charges its own tax on the gain regardless, and FTCR cannot be claimed against a UK liability that PPR has already reduced to nil, so the two reliefs do not combine.

Temporary non-residence: the returning-resident trap

TCGA 1992 s.10A contains an anti-avoidance rule for individuals who leave the UK, sell an overseas asset while non-resident, and then return. If you are resident in the UK, become non-resident, sell an overseas property during the non-resident period, and then resume UK residence within five complete tax years, the gain is treated as accruing in the year you return to the UK. You pay UK CGT as a resident in the year of return, not in the year of sale.

The practical effect: leaving the UK and selling your overseas property while non-resident does not guarantee freedom from UK CGT if you intend to return within five years. The rule catches the gain on return. Foreign tax paid during the non-resident period can still be credited under FTCR, but the UK CGT charge arises in the later year.

This rule runs in one direction only: it catches someone who departs the UK and returns. It does not rebase overseas property to market value when you first become UK resident. If you owned overseas property before moving to the UK and have been continuously resident since, the base cost is the original acquisition cost (in sterling at the acquisition-date spot rate), not market value at the date of arrival.

HMRC's visibility of overseas disposals

Since 2017, HMRC has received automatic data on overseas financial accounts and assets under the Common Reporting Standard (CRS) and the automatic exchange of information (AEOI) framework. Over 100 countries, including Spain, France, Portugal, Italy, and the UAE, report UK-resident account holders' financial information to HMRC each year. Overseas property sale proceeds flowing through a local bank or notary are within the data HMRC receives.

This matters in practice: HMRC can cross-reference CRS data against Self Assessment returns. An overseas property disposal that is not declared is detectable. The standard four-year assessment window applies for innocent errors; a six-year window applies where there has been a failure to take reasonable care; and there is no time limit where HMRC can establish deliberate non-disclosure. Declaring the disposal correctly on SA108 and SA106 is both the legal obligation and the practical protection.

Common scenarios

Holiday homes

A holiday apartment in Spain, France, or Portugal owned as a second home qualifies for no PPR during the holiday-home period (unless it was at some point nominated and used as your main residence). The full gain is chargeable. FTCR is available for any Spanish, French, or Portuguese capital gains tax paid on the same disposal.

Inherited overseas property

The CGT base cost for inherited overseas property is the market value at the date of death (the same probate-value rule applies as for UK property, per TCGA 1992 s.62(1)). The estate agent or valuer's figure used for the overseas probate process will typically be the starting point. On sale, the gain is measured from that probate value, converted to sterling at the exchange rate on the date of death. Enhancement costs from the legatee's ownership period are also allowable.

Foreign investment property previously let

Where the overseas property was let, rental income should already have been declared on the foreign supplementary pages of the Self Assessment return each year. On disposal, any capital improvement costs claimed as revenue repairs (and thus already deducted against rental income) cannot be re-claimed as enhancement expenditure for CGT. Only capital expenditure not already deducted against income qualifies.

How this differs from non-resident CGT on UK property

The two situations are completely distinct and the rules do not overlap. A quick comparison:

Situation	This page	Non-resident CGT page
Who is selling?	UK tax resident	Non-UK tax resident
Where is the property?	Outside the UK	In the UK
60-day return required?	No (overseas property; SA only)	Yes (UK land; 60 days even if no tax due)
Reporting forms	SA108 + SA106	NRCGT return (standalone) + SA108
Foreign tax credit?	Yes, FTCR under TIOPA 2010	Different treaty mechanics
PRR availability?	Yes, on any period of main residence	Yes, but with occupation tests

If you are a non-UK resident selling UK property, the rules are substantially different. See our guide to non-resident CGT on UK property disposals for the full framework.