How does capital gains tax work when you emigrate from the UK?
Answered 11 March 2026
Here is a comprehensive answer on how CGT works when you emigrate from the UK.
Capital Gains Tax on Emigration from the UK
What the law says
No exit charge on emigration. There is no form of capital gains "exit charge" applying to individuals when they emigrate from the UK. This contrasts with companies, which may face an exit charge on chargeable assets when they cease to be UK resident.
Disposals before departure. If a disposal occurs before the date of departure, the individual is liable to UK CGT in the normal way.
Disposals after departure (2013-14 onwards — Statutory Residence Test era). From 2013-14, the Statutory Residence Test (SRT) determines residence. An individual will be either resident or not resident for the year, though split-year treatment may apply. If a disposal occurs in the overseas (non-UK) part of a split year, the gain is normally exempt as it falls outside the scope of TCGA 1992 s.2 — unless the temporary non-residence rules apply.
The temporary non-residence trap (TCGA 1992 s.10A). This is the key anti-avoidance rule. It prevents individuals from avoiding CGT by leaving the UK, disposing of assets while non-resident, and then returning. It applies where:
- The individual was solely UK resident for at least 4 out of the 7 tax years immediately preceding departure; and
- The period of temporary non-residence is 5 years or less.
Where s.10A applies, gains accruing during the non-resident period are treated as accruing in the year of return to the UK and are charged to CGT at that point.
Assets acquired during the non-resident period. Gains on assets acquired during the period of temporary non-residence (in a period when the individual does not have sole UK residence) are generally excluded from the s.10A charge. However, this exclusion does not apply to assets held in non-resident trusts or closely controlled non-resident companies.
Double taxation. Where a gain caught by s.10A has also been taxed in another country during the non-resident period, relief for foreign tax paid may be available.
HMRC guidance / practice
Timing of disposal matters. HMRC guidance makes clear that if a sale is genuinely postponed and the individual's residence position has changed by the date of disposal, there will be no UK CGT charge. However, HMRC may enquire whether the disposal actually occurred on an earlier date.
Anti-avoidance on timing. CGT liability may still arise even where the disposal appears to be after the date of emigration in the following circumstances:
- There was a binding contract for sale on or before the date of residence change;
- A business was carried on in the UK through a branch or agency between emigration and disposal; or
- The disposal falls in a period of temporary non-residence.
Pre-2013 rules (historical). For years up to and including 2012-13, under the old rules, someone emigrating remained chargeable on gains made between the date of departure and the following 5 April. Extra-Statutory Concession D2 provided relief in certain cases. The temporary non-residence rules under s.10A were introduced by Finance Act 1998 and apply to departures on or after 17 March 1998.
Summary
| Scenario | CGT outcome |
|---|---|
| Disposal before departure | Fully chargeable to UK CGT |
| Disposal after departure, non-resident for more than 5 years | Exempt from UK CGT |
| Disposal after departure, non-resident for 5 years or less (and 4/7 year test met) | Gains charged in year of return under s.10A |
| Disposal after departure but binding contract existed before departure | Treated as disposal before departure — chargeable |
Citation sources
Where assets have been acquired by an individual during a residence period when they do not have sole UK residence, and that residence period falls within a period of temporary non-residence, then any gains realised on those assets in the period of temporary non residence will in general be excluded from the scope of TCGA92/S10A* and hence from the charge under TCGA92/S2*, see CG26600. Similarly losses accruing in such circumstances will not be allowable. This exclusion from the scope of TCGA92/
Period A - This is the last residence period for which the individual had sole UK residence, immediately preceding a residence period for which the individual does not have sole UK residence. Period of return - This is the first residence period after period A for which the individual has sole UK residence. Resident - The term resident referred to in TCGA92/S10A* and elsewhere in the TCGA for 2013-14 and later years, is defined for Capital Gains Tax purposes in accordance the Statutory Residence
TCGA92/S10A* prevents a taxpayer avoiding Capital Gains Tax by leaving the UK, disposing of assets while they are non-resident and then returning to the UK. It applies if a UK resident taxpayer leaves the UK for a period of up to five complete tax years. Gains that accrued to the taxpayer while they were non-resident are treated as accruing in the year they return to the UK. See CG26100 for guidance on TCGA92/S10A*. Section 10A will apply to any TCGA92/S86 gains that accrued in the period of tem
An individual intending to emigrate from the UK and dispose of assets may arrange his or her affairs so that although they have certainty or near-certainty that the sale will occur before their UK residence position changes, it appears that the disposal for tax purposes takes place after that date. There are a number of circumstances in which Capital Gains Tax liability may arise notwithstanding that the date of disposal appears to be after the date of emigration. These are where it can be shown
Finance Act 1998 introduced TCGA92/S10A, see CG26100+, which modifies TCGA92/S2 so that certain gains accruing to former UK residents during a period of temporary non-residence abroad (broadly defined as a period of less than five full tax years) are chargeable as if they accrued in the year of return to the UK. ESCD2 was revised; see CG25720, to bring its terms broadly into line with the provisions of Section 10A. Consequently, for departures on or after 17 March 1998, gains on disposals after
In practice a gain that is within the scope of s10A* may have been charged to tax in another country for the year that it arose. If this occurs a measure of relief for foreign tax paid will be due. If S10A* applies to a gain that has also been taxed in another country in the period of temporary non residence any claim to relief for foreign tax paid and / or any difficulties in dealing with claims in respect of exemptions under a double taxation agreement should initially be referred to Capital G
For years up to and including 2012-13 a person’s residence position could change part-way through a year of assessment. For example, someone who was never resident or ordinarily resident in the UK may have settled here and become resident and ordinarily resident or someone who was resident and ordinarily resident may emigrate and thereby become not resident and not ordinarily resident. Capital Gains Tax is assessed for a year of assessment or tax year and so we have to consider the consequences
resumes residence in the UK and the temporary non-residence rules in TCGA92/S10A* or the other exceptions in CG10978 apply). So if the sale is genuinely postponed and the individuals residence position has changed by the date of disposal then there will be no charge to UK Capital Gains Tax. However, enquiries might reveal that despite appearances the disposal actually occurred on an earlier date or if the year being considered is 2012-13 or earlier that HMRC is justified in withholding the benef
When an individual plans to emigrate from the UK they will often want to dispose of their assets located in the UK before departure. This is particularly true of privately run businesses carried on in the UK but it is often also true of other property located in the UK. For such assets it may be necessary, or at least convenient, for the individual to be in the UK to deal with negotiations for the sale. The individual may also need to have a definite sale arranged in order to ensure he or she ha