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UK-Hong Kong Property Selling Capital Gains Tax Guide 2026

Practical 2026 guide for UK tax residents selling Hong Kong property: UK CGT on foreign real estate, treaty Article 13, Private Residence Relief, foreign-currency gain calculations, Hong Kong Profits Tax risk and Self Assessment reporting.

UK CGT on Hong Kong Property: The Basic 2026 Framework

A person who is UK tax resident can generally be subject to UK Capital Gains Tax on chargeable gains arising from the disposal of foreign real estate. A Hong Kong property disposal must therefore be analysed under UK CGT rules even though Hong Kong does not operate a separate general Capital Gains Tax. Hong Kong can nevertheless tax profits arising from a property transaction where the facts show that the transaction is trading or an adventure in the nature of trade.

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UK tax residence can bring a Hong Kong property gain into the UK CGT computation.
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Hong Kong has no general standalone Capital Gains Tax.
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Hong Kong Profits Tax can apply if a property disposal produces trading/revenue profits.
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The treaty's Article 13 governs gains from Hong Kong immovable property.
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A UK resident may therefore need to analyse both UK CGT and any Hong Kong source-state tax.
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The exact result depends on residence, treaty allocation, property use, acquisition history and the nature of the disposal.

UK-Hong Kong Treaty Article 13: Immovable Property Gains

The UK-Hong Kong Double Taxation Agreement places capital gains on immovable property in Article 13. A gain from the alienation of immovable property situated in the other jurisdiction may be taxed in that other jurisdiction. Therefore a UK resident selling Hong Kong real estate can potentially have a Hong Kong treaty source-state taxing right as well as UK taxation under domestic law. The treaty also contains special rules for shares or comparable interests deriving more than 50% of their value from immovable property.

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The relevant treaty article is Article 13, not Article 12.
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The source-state treaty right does not mean Hong Kong necessarily imposes tax under its domestic law.
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If both countries actually tax the same gain, the treaty's double-tax-relief mechanism and UK FTCR rules must be considered.
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The treaty contains separate rules for property-rich share disposals.
Asset / GainUK-Hong Kong Treaty Treatment
Hong Kong immovable propertyHong Kong may tax the gain under Article 13(1)
Business property of a PESource-state taxing right can apply under Article 13(2)
Shares deriving more than 50% of value from immovable propertyRelevant source-state taxing right under Article 13(4), subject to treaty exceptions
Other propertyGenerally taxable only in the residence state under Article 13(5)

Hong Kong Does Not Have General CGT, But Property Trading Can Be Taxable

Hong Kong does not levy a general capital-gains tax on genuine capital disposals. However, the Inland Revenue Department states that profits from a property transaction can be chargeable to Profits Tax where the transaction amounts to a trade or an adventure in the nature of trade. The IRD considers factors such as the motive for purchase, financial arrangements, frequency of transactions, holding period and mode of operation.

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A genuine capital gain is generally outside Hong Kong Profits Tax.
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A property bought/sold as part of a profit-making scheme can be treated as trading stock or a trading transaction.
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Short holding periods can be relevant evidence but are not by themselves decisive.
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The purpose and circumstances of acquisition and disposal are important.
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Hong Kong Special Stamp Duty, where applicable, is separate from Profits Tax.
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Paying Special Stamp Duty does not prevent a separate Profits Tax liability where the transaction is trading.

HMRC CGT Rates for Hong Kong Residential Property Gains

For the 2026-27 UK tax year, the annual exempt amount for an individual is £3,000. Residential property gains are generally taxed at 18% to the extent they fall within the basic-rate band and 24% above that, after taking account of the individual's taxable income, available losses and reliefs. The relevant rate is not determined simply by the taxpayer's gross salary bracket.

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The £3,000 annual exempt amount applies before charging CGT but is lost in a year in which the individual claims FIG or Overseas Workday Relief.
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The tax band calculation uses taxable income plus the relevant gain, not simply the salary band shown in isolation.
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18%/24% are the prevailing individual CGT rates for the relevant 2026-27 classes of gains.
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Reliefs, losses, PRR and other statutory adjustments can materially reduce the taxable gain.
2026-27 UK CGT ElementCurrent Position
Annual Exempt Amount£3,000 for an individual
Residential property gain within unused basic-rate band18%
Residential property gain above the basic-rate band24%
Non-residential/other gainsGenerally 18% / 24% depending on income, subject to the applicable asset and taxpayer rules

FIG and a Hong Kong Property Gain

The Foreign Income and Gains (FIG) regime can be relevant to a qualifying new UK resident who makes a qualifying foreign gain during the first four tax years of UK residence. However, a FIG claim is not automatic and it has important consequences. A claimant loses the Personal Allowance and CGT annual exempt amount for the claim year, and foreign capital losses are subject to the FIG restrictions. Therefore the correct result is not simply '0% CGT for four years'.

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The taxpayer generally needs at least 10 consecutive tax years of prior non-UK residence.
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The individual must be UK resident and within the first four qualifying years.
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A FIG claim is made for the relevant tax year.
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A qualifying foreign property gain can potentially be relieved under FIG.
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Claiming FIG removes the CGT annual exempt amount for that year.
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Foreign capital losses can be unavailable in a FIG claim year.
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Hong Kong treaty/source-state rights must still be analysed separately.

Private Residence Relief for a Hong Kong Home

Private Residence Relief (PRR) can apply to a Hong Kong property if the property genuinely qualifies as the individual's only or main residence under UK rules. PRR is not restricted to UK property simply because the property is overseas. The gain usually needs to be apportioned so that qualifying occupation periods and statutory deemed-occupation periods receive relief, while non-qualifying periods may remain chargeable.

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The property must have been the individual's only or main residence at some point.
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The final 9-month exemption is not a blanket rule independent of the residence requirement.
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Disabled persons and certain care-home residents can have a 36-month final period.
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Periods of overseas employment can have separate absence relief where the statutory conditions are satisfied.
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If the property was let, used for business or was one of multiple homes, additional PRR rules apply.
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The gain usually needs to be apportioned rather than simply treated as fully exempt.
PRR PeriodGeneral 2026 Treatment
Actual qualifying occupationPotentially relieved as part of the qualifying residence period
Final periodLast 9 months normally qualify if the property has been the individual's only or main residence at some point
Disabled person / qualifying care-home caseFinal 36 months may qualify where the statutory conditions are met
Other absence periodsPotential statutory deemed-occupation relief depending on the reason and conditions

PRR After Moving From Hong Kong to the UK

Moving from Hong Kong to the UK does not automatically end PRR. What matters is the property's history as the individual's only or main residence and whether the statutory absence rules apply. A period spent away because of qualifying overseas employment, for example, can potentially receive deemed-occupation relief where the conditions are satisfied. However, a person generally needs to have lived in the property as their main residence before and after the relevant absence unless a statutory exception applies.

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The UK move itself is not the PRR test.
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The property-use history must be reconstructed from acquisition through disposal.
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Qualifying overseas-work absences can receive statutory relief.
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Ownership of another residence can affect PRR and home nomination.
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Marriage/civil partnership rules can limit the number of residences qualifying for a couple.
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The final gain calculation should separate occupation, qualifying absence and non-qualifying periods.

Foreign Currency: How HMRC Calculates the Gain in GBP

HMRC computes the capital gain in sterling. Foreign-currency amounts are converted separately rather than calculating a gain entirely in Hong Kong dollars and then converting the final gain once. Acquisition costs are converted using the relevant exchange rate when the cost arises, and disposal proceeds are converted using the rate applicable when the proceeds arise. The particular dates and transaction components therefore matter.

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Do not simply calculate the HKD gain and convert the final result to GBP.
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Sterling is the currency in which the UK CGT computation is performed.
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A property can produce a UK gain even where the HKD price movement appears flat because of exchange-rate movements.
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The sale date and acquisition date matter, but individual costs may have their own relevant dates.
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Keep the exchange-rate source and calculation record.
AmountGeneral Sterling Conversion Principle
Acquisition priceConvert the HKD amount into sterling using the rate applicable when the acquisition cost arises.
Disposal proceedsConvert the HKD consideration into sterling using the rate applicable when the disposal proceeds arise.
Incidental acquisition costsConvert each qualifying cost using the applicable rate when that cost is incurred.
Incidental disposal costsConvert each qualifying cost using the applicable rate when that cost is incurred.

Allowable Costs When Calculating the Hong Kong Property Gain

The UK CGT calculation is based on the chargeable gain, not simply sale proceeds minus the purchase price. Qualifying acquisition costs, disposal costs and capital expenditure that enhances the property's value and is reflected in the property at disposal can potentially be deducted under the UK CGT rules. Ordinary maintenance and revenue expenses generally do not receive the same treatment.

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Purchase costs can include qualifying legal and professional fees and transaction taxes where permitted.
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Sale costs can include qualifying estate-agent and legal fees.
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Capital improvements can potentially be deducted where they meet the statutory conditions.
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Routine repairs and maintenance are generally not enhancement expenditure for CGT.
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Original purchase documentation should be retained.
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Hong Kong stamp duties and transaction costs need to be analysed under UK CGT rules rather than assumed automatically deductible.

Rebasing and Historic Acquisition Dates

A historic Hong Kong property can require special consideration of the acquisition date and any statutory rebasing rules available for particular periods or circumstances. A taxpayer should not simply use the property's 5 April 2015 or 6 April 2019 value without identifying an actual statutory rebasing provision that applies to the asset and taxpayer. Since the remittance basis was abolished from 6 April 2025, historical offshore gains must also be separated carefully from current FIG claims and transitional rules.

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There is no general rule that every Hong Kong property is rebased automatically on one universal date.
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Actual acquisition date normally remains important.
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Any statutory rebasing must be identified specifically.
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Former remittance-basis users can have transitional historical-gain issues.
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FIG applies to qualifying foreign gains arising in qualifying years; it does not simply revalue all historic property.

Reporting a Hong Kong Property Disposal to HMRC

A Hong Kong property is foreign property, so the UK's 60-day Capital Gains Tax on UK Property reporting regime does not apply merely because the property is residential. A UK resident normally reports the foreign capital gain through the Self Assessment capital-gains pages where a Self Assessment return is required. The 2026 SA108 is the relevant capital-gains summary page.

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The 60-day UK Property account is not a general foreign-property rule.
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SA108 is the relevant capital-gains supplementary page for annual Self Assessment reporting.
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The gain may also need to be considered for FIG where the taxpayer qualifies.
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Keep the property disposal calculation and foreign-exchange evidence with the return records.
DisposalTypical UK Reporting Route
Hong Kong residential property sold by UK residentSelf Assessment / SA108 where reporting is required
UK residential property sold by UK residentSeparate 60-day CGT on UK Property return may apply
UK property sold by non-UK residentNon-resident UK property reporting rules can impose the 60-day requirement

Foreign Tax Credit Relief if Hong Kong Taxes the Gain

If Hong Kong actually charges tax on the property disposal because the transaction is treated as a taxable trade/profit-making activity, the UK resident may need to calculate whether the same gain/profit is also taxed in the UK. Treaty Article 13 permits Hong Kong to tax gains from Hong Kong immovable property, while the UK's domestic rules can tax the gain because the individual is UK resident. If both jurisdictions tax the same item, Article 21 and UK foreign-tax-credit rules should be considered.

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Hong Kong's no-general-CGT position does not mean Hong Kong can never tax a property disposal.
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Trading/property-profit cases can create Hong Kong Profits Tax.
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The UK credit is limited by the applicable UK tax on the same doubly taxed item.
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A tax that Hong Kong was not entitled to charge under its own rules should generally be reclaimed from Hong Kong rather than assumed creditable in the UK.
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The treaty article and the domestic tax basis should both be documented.

Temporary Non-Residence and a Former Hong Kong Home

If the taxpayer previously lived in the UK, moved to Hong Kong and later returned within the temporary-non-residence rules, certain gains arising during the non-resident period can have special UK tax consequences on return. This regime is separate from ordinary UK residence, PRR and FIG. A former Hong Kong property owner should therefore check both the departure/return history and the property disposal dates.

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Temporary non-residence can bring certain gains made while abroad into UK tax on return.
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The relevant residence history and length of non-residence must be checked.
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PRR and temporary non-residence are separate regimes.
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FIG and temporary non-residence also have separate interaction rules.
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A simple statement that 'the property was sold while abroad, so UK CGT cannot apply' is unsafe.

Practical 2026 Hong Kong Property CGT Workflow

A reliable Hong Kong property CGT calculation should determine UK residence first, then identify the exact disposal, property use, acquisition history and Hong Kong tax position. Next calculate the gain in sterling, apply allowable costs and PRR where available, test FIG eligibility, apply the UK tax rates and then check Article 13 and any foreign-tax credit. Finally report through the correct Self Assessment route rather than incorrectly using the 60-day UK-property return.

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Step 1: determine UK residence for the disposal tax year.
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Step 2: identify acquisition date, cost and transaction expenses.
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Step 3: identify the disposal date, proceeds and disposal costs.
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Step 4: reconstruct the property's main-residence and absence history.
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Step 5: calculate each sterling-denominated amount at the applicable transaction date.
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Step 6: calculate the raw UK gain.
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Step 7: apply PRR and any other qualifying UK CGT reliefs.
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Step 8: deduct allowable losses and, where available, the annual exempt amount.
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Step 9: test whether FIG is available and whether claiming it is economically beneficial.
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Step 10: determine the UK CGT rate after considering taxable income and the type of gain.
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Step 11: assess whether Hong Kong Profits Tax applies to the disposal.
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Step 12: apply Article 13 and Article 21 / UK foreign-tax-credit rules where both countries tax the same item.
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Step 13: report the gain through the appropriate SA108/Self Assessment process.
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Step 14: retain acquisition, disposal, exchange-rate, residence, PRR and Hong Kong tax documentation.

Frequently Asked Questions (6)

Hong Kong does not impose a general Capital Gains Tax on genuine capital gains. However, the Inland Revenue Department can charge Profits Tax where the property transaction amounts to a trade or an adventure in the nature of trade. The facts can include the purchase motive, financing, frequency, holding period and method of dealing. Hong Kong property-sale profits therefore cannot all be described as automatically tax-free.

If you are UK tax resident, a gain on Hong Kong real estate can generally fall within UK CGT, subject to PRR, losses, FIG and other applicable reliefs. The 60-day UK property reporting rule does not apply merely because the asset is residential: that fast reporting regime is for UK residential property. A Hong Kong disposal is generally dealt with through the normal Self Assessment/capital-gains process where required.

HMRC calculates the gain in sterling. You should generally convert the acquisition cost, disposal proceeds and relevant incidental costs separately at the exchange rate applicable when each amount arises, rather than calculating the entire gain in Hong Kong dollars and converting the final gain once. This means exchange-rate movements can affect the UK taxable gain materially.

For an individual, residential-property gains are generally charged at 18% to the extent they fall within unused basic-rate band and 24% above that, after applying losses and reliefs. The annual exempt amount for 2026-27 is £3,000, but a person claiming FIG or Overseas Workday Relief does not receive that annual exempt amount. The exact rate therefore depends on the taxpayer's income and the final gain calculation.

Potentially. PRR is not restricted to UK property, but the Hong Kong flat must qualify as your only or main residence under the UK rules. The gain normally has to be apportioned between qualifying occupation and non-qualifying periods. The final 9 months can normally qualify once the property has been your only or main residence, while qualifying disabled or care-home cases can receive a 36-month final period. Other absence and multiple-home rules can change the result.

No, not simply because the Hong Kong property is residential. HMRC's 60-day Capital Gains Tax on UK Property reporting regime applies to disposals of UK residential property. A Hong Kong property sale by a UK resident is foreign property and is generally reported through the Self Assessment capital-gains process, including SA108 where required. The normal Self Assessment deadline is therefore different from the 60-day UK-property deadline.
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2026 TAX SNAPSHOT

Standard Personal Allowance
£12,570
Standard allowance; specialist and Scottish rules can differ.
England / Wales / Northern Ireland Basic-Rate Band
£37,700
£50,270 including the standard £12,570 Personal Allowance.
4-Year FIG Regime
Maximum 4 tax years
Available to qualifying new UK residents after at least 10 years of non-UK residence.
IHT Long-Term UK Residence
10 of previous 20 years
Overseas-asset exposure can continue for 3–10 years after leaving, depending on residence history.

Summary Takeaways & Checklist

  • Hong Kong has no general Capital Gains Tax, but property-sale profits can be taxable under Hong Kong Profits Tax where the transaction is trading or an adventure in the nature of trade.
  • A UK resident can generally be within UK CGT on a Hong Kong property gain.
  • The UK-Hong Kong treaty's relevant capital-gains provision is Article 13.
  • The UK's 60-day property-disposal regime applies to UK property, not automatically to foreign property such as a Hong Kong flat.
  • A Hong Kong gain is generally computed in sterling, with foreign-currency amounts converted at the relevant rate when each amount arises.
  • PRR can apply to a Hong Kong home if it qualifies as the individual's only or main residence, but the gain normally needs to be apportioned between qualifying and non-qualifying periods.
  • The final 9-month PRR rule is subject to conditions, while qualifying disabled/care-home cases can have a 36-month final period.
  • FIG may relieve a qualifying foreign property gain for an eligible new UK resident, but the claim is not automatic and removes the CGT annual exempt amount for that year.
  • Hong Kong tax actually imposed on a taxable property profit can potentially interact with UK foreign-tax-credit relief where the same item is taxed in both jurisdictions.
  • Foreign property gains are normally reported through the Self Assessment capital-gains process/SA108 where required.

Official References & Manuals

GOV.UK Capital Gains Tax Reporting and PaymentHMRC Capital Gains Tax Rates and Allowances 2026-27HMRC Private Residence Relief 2026HMRC Foreign Currency CGT ComputationHMRC Sterling Computation of Foreign GainsHMRC SA108 Capital Gains Summary 2026HMRC FIG Regime 20262010 UK-Hong Kong Double Taxation AgreementHong Kong IRD Property Transaction Profits Tax FAQHong Kong IRD Profits TaxHong Kong IRD Property TaxGOV.UK Hong Kong Tax Treaties / MLI

Related HMRC Guides

UK-Hong Kong DTAA Double Tax Relief GuideUK Capital Gains Tax Property Rates CalculatorUK Foreign Income & Gains (FIG) Regime Guide