Capital Gains Tax & Inheritance

Navigating tax obligations can be challenging—especially when you live, work, or invest across multiple countries. At Credible Life, we help British expats understand their UK tax responsibilities and the implications of holding assets worldwide.

Below is a clear breakdown of the key taxes that may affect you, along with guidance on how our specialists can support you.

What Is Capital Gains Tax (CGT)?

Capital Gains Tax (CGT) is a tax applied to the profit you make when selling or disposing of an asset that has increased in value. The tax is charged on the gain, not the total sale price.

CGT applies to gains on:

• Shares and equities

• Investment funds

• Second homes or additional properties

• Inherited properties (when sold)

• The sale of a business

• High-value assets such as art, jewellery, and antiques

• Assets transferred below market value

Different asset classes are taxed at different CGT rates, which are separate from income tax. Because these assets are classed as investments, the tax system recognises the greater risks and potential rewards involved.

How CGT Works:

• You compare the asset’s purchase price with the sale price.

• The difference (the gain) may be subject to tax.

• Certain allowances and exemptions may reduce your liability.

• Expats may still be liable for UK CGT on UK property or certain UK-based assets.

Our advisers can help assess your exposure to CGT in the UK and abroad, while ensuring you structure your assets efficiently.

What Is Inheritance Tax (IHT)?

Inheritance Tax is typically charged at 40% on estates valued over £325,000, although this threshold can be higher if a residence is included.

Your estate includes:

• Cash and savings

• Property and personal possessions

• Certain pension funds

• Gifts made within seven years before death (above exempt allowances)

The first £325,000 of your estate—known as the Nil-Rate Band—is tax-free.

Who Is Exempt From Inheritance Tax?

• Spouses and civil partners: Passing your entire estate to them is fully exempt from IHT.

• Transferrable allowances: Any unused Nil-Rate Band can be transferred to the surviving spouse.

• Charitable giving: Gifts to charity are exempt. Leaving 10% or more of your net estate to charity may reduce IHT to 36%.

• Annual gifting allowances: Up to £3,000 per year plus other small or specific gifts (e.g., wedding gifts) may be exempt.

Note: Some lifetime gifts may become taxable depending on their value and timing.

Expats often face additional complexity due to assets held in different countries—our specialists help you understand how UK IHT interacts with foreign jurisdictions.

Double Taxation Agreements

Living abroad can create tax exposure in more than one country. Double taxation occurs when two different countries tax the same income, gain, or asset.

What is Double Taxation?

It can arise when:

• You are resident in two countries simultaneously.

• You earn income in one country while living in another.

• You are taxed on worldwide income in your country of residence.

Example:
A UK resident renting out overseas property may owe tax in the UK and in the country where the property is located.

What Are Double Taxation Agreements (DTAs)?

The UK has over 130 Double Taxation Agreements, designed to prevent citizens from paying tax twice on the same income.

These agreements:

• Define which country has the right to tax specific types of income.

• Override domestic tax laws where applicable.

• Allow tax paid in one country to be offset against tax due in another.

Example:

Interest earned in the UK by a resident of France would normally be taxable in the UK. However, under the UK–France DTA, only France may tax this income. The individual can then claim exemption from UK tax via HMRC.

How DTAs protect expats:

• Prevent paying tax twice on pensions, employment income, property income, and investments.

• Clarify residency status and tax obligations.

• Provide mechanisms for tax relief or credit.

Understanding double taxation rules is essential for expats with international income streams or assets held across borders.

How Credible Life Helps Expatriates

Our trusted, UK-qualified financial advisers specialise in cross-border tax planning and can provide tailored advice on:

• Capital Gains Tax planning

• Inheritance Tax reduction strategies

• Structuring your estate internationally

• Understanding double taxation agreements

• Tax-efficient investment planning

• Residency and domicile implications

• Protection of overseas assets

• Optimising lifetime gifting strategies

With extensive knowledge of global tax jurisdictions and over 30 years of combined advisory experience, our partners provide clear, reliable guidance—no matter where you live.

Get Personalised Tax & Estate Planning Advice

Tax rules for expats are complex—but you don’t need to navigate them alone.
Speak to one of our international financial specialists today and get clarity on your global tax position.