General information, not tax advice. Get advice on your own facts before you file.
This covers the UK side only. For the full process (PoA, TDS, registration, repatriation), start with our hub: how to sell property in India from the UK.
Does HMRC tax a gain on property in India?
Yes, if you are UK resident in the tax year of sale, because UK residents are taxed on worldwide gains. Under the India–UK DTAA, India also taxes the gain because the property is there, and the UK gives credit for the Indian tax.
UK residence is decided by the Statutory Residence Test; your Indian NRI status is a separate question that drives the India side (12.5% LTCG without indexation, TDS on the full price). Our DTAA guide for NRIs explains how the two sides fit together.
How is the gain calculated in pounds?
HMRC wants the gain in GBP, with each figure converted at the rate for its own date:
- Cost: purchase price (plus allowable costs such as stamp duty and improvements) converted at the exchange rate on the acquisition date.
- Proceeds: sale price (less allowable selling costs) converted at the rate on the disposal date.
- Gain: proceeds in GBP minus cost in GBP.
You cannot simply convert the rupee gain at today's rate. Because the rupee has generally weakened against the pound, the GBP gain is often smaller. Keep the rates you used and their source.
There is no short-term/long-term split in the UK.
What are the UK CGT rates and allowance?
| 2025-26 onwards | |
|---|---|
| Basic-rate band | 18% on gains within your unused basic-rate band |
| Higher and additional rate | 24% |
| Annual exempt amount | £3,000 per person |
| Applies to | Residential property and, since 30 October 2024, other assets too |
Gains sit on top of your income, so most higher-rate taxpayers pay 24% on the whole gain. If the property is jointly owned, each owner reports their share and can use their own £3,000 exemption.
How does Foreign Tax Credit Relief work for Indian property?
Foreign Tax Credit Relief (FTCR) reduces your UK CGT by the Indian tax paid on the same gain. Three rules matter:
- It is capped. The credit cannot exceed the UK tax on that gain. If India took more, HMRC does not refund the excess.
- It is for tax due, not TDS deducted. TDS on the full sale price often exceeds your actual Indian liability, and only the final liability counts. Get the excess back by filing your Indian return, or avoid it upfront with a Form 128 (earlier Form 13) certificate.
- It is claimed on SA106, alongside the gain on SA108.
Because the credit is capped, Indian reinvestment reliefs such as Section 54EC can backfire for UK residents. Each pound of Indian tax you save is a pound of credit you lose, so if UK tax is higher, HMRC simply collects the difference. Section numbers are the familiar ones from the 1961 Act; the 2025 Act renumbers them but the relief is the same. Model both sides first with the DTAA calculator.
Worked example: inherited flat, where the credit cap bites
Illustrative only. Exchange rates are assumptions, not actual historical rates. Selling costs are ignored.
Arjun lives in London and is a higher-rate taxpayer. His mother bought a flat in Chennai in 2005 for ₹30 lakh. She died in 2016, when it was worth ₹80 lakh. Arjun sells it in 2026 for ₹1.1 crore. He has no other gains that year.
Assumed rates: £1 = ₹95 at the date of death; £1 = ₹115 at sale (also used for the Indian tax).
India. For Indian tax, an heir takes over the previous owner's cost, so the gain is ₹1.1 crore − ₹30 lakh = ₹80,00,000.
| Item | Amount |
|---|---|
| Tax at 12.5% | ₹10,00,000 |
| Surcharge 10% | ₹1,00,000 |
| Cess 4% | ₹44,000 |
| Indian tax | ₹11,44,000 (≈ £9,948) |
UK. HMRC uses the market value at the date of death as the base cost.
| Item | Amount |
|---|---|
| Proceeds (₹1.1 crore ÷ 115) | £95,652 |
| Base cost (₹80 lakh ÷ 95) | £84,211 |
| Gain | £11,442 |
| Less annual exempt amount | £3,000 |
| Taxable gain | £8,442 |
| UK CGT at 24% | £2,026 |
| FTCR (capped at UK tax) | £2,026 |
| UK tax to pay | £0 |
Arjun owes nothing to HMRC, but around £7,922 of Indian tax (£9,948 − £2,026) goes unrelieved. The stepped-up UK base cost and the weaker rupee drive this. He must still report the disposal and claim the credit. The inherited LTCG calculator helps with the India side.
What does inherited property cost for UK CGT?
For UK purposes, your base cost is the market value at the date of death, converted at that date's exchange rate. Get a formal valuation as of that date. This often makes the UK gain far smaller than the Indian gain, which uses the original owner's cost.
Can Private Residence Relief apply to a home in India?
Possibly, but rarely. Private Residence Relief can exempt a gain on your main home, including one abroad. For periods after April 2015, an overseas home only counts for a tax year if you were tax resident in that country or spent at least 90 nights in that home (or other homes in that country) in that year (the 90-day test). If you lived there before moving to the UK, part of the gain may qualify. The rules are technical, so take UK tax advice before relying on them.
Non-doms and the remittance basis after April 2025
Until 5 April 2025, non-domiciled UK residents could claim the remittance basis. A foreign gain was taxed only if the money was brought into the UK, so many left Indian sale proceeds in NRO accounts.
That ended on 6 April 2025. The remittance basis was abolished and replaced by the Foreign Income and Gains (FIG) regime:
- Who qualifies: people who become UK resident after 10 consecutive tax years of non-residence.
- What it gives: relief from UK tax on foreign income and gains in their first 4 tax years of UK residence, whether or not the money is brought to the UK.
- Cost: claiming generally means losing the personal allowance and the CGT annual exempt amount for that year. It has to be claimed on your return.
If you have lived in the UK for longer, or arrived without 10 years abroad first, an Indian property gain is taxable in the UK in the year of sale, wherever the money sits. Long-standing non-doms who planned around remittances should check their position before selling.
When do I report and pay?
| Step | Deadline |
|---|---|
| UK tax year of sale | 6 April to 5 April (India's is April–March, nearly aligned) |
| Register for Self Assessment, if new | 5 October after the tax year ends |
| Paper return | 31 October after the tax year ends |
| Online return and payment | 31 January after the tax year ends |
For a sale in the 2026-27 UK tax year (6 April 2026 to 5 April 2027), the online return and the tax are due by 31 January 2028.
The 60-day UK property CGT return does not apply to overseas property, so do not file one for an Indian sale. CGT is also not included in payments on account.
Records to keep: purchase and sale deeds, or the date-of-death valuation; the exchange rates and their source; the Indian tax computation, ITR and TDS certificates; and the bank and remittance trail.
Need help with both sides?
We handle the India side end to end and give you the records your UK return needs. Read the UK seller's hub, see our property sale service, or book a free call on +91-97119-88391.
Related guides
Keep reading: Form 128 (earlier Form 13) certificate.
Do I pay UK tax if I keep the sale money in India?
Usually, yes. Since the remittance basis was abolished on 6 April 2025, UK residents are taxed on foreign gains whether or not the money comes to the UK. The exception is the 4-year FIG regime, available only to people in their first 4 tax years of UK residence after 10 consecutive years of non-residence.
What exchange rate does HMRC use for an Indian property sale?
Convert the cost at the exchange rate on the date you acquired the property, or the date of death if you inherited it. Convert the sale proceeds at the rate on the disposal date. Then subtract one from the other in pounds. Do not convert the rupee gain at a single rate. Keep a record of the rates and their source.
Can I claim the TDS deducted in India as a UK tax credit?
No, only your final Indian tax liability on the gain counts. TDS is deducted on the full sale price and often exceeds the tax actually due. Reclaim the excess by filing your Indian return, or reduce TDS upfront with a Form 128 certificate. The UK credit is also capped at the UK tax on the same gain.
Which Self Assessment pages do I need?
You need the capital gains summary pages (SA108) to report the disposal in pounds and the foreign pages (SA106) to claim Foreign Tax Credit Relief for the Indian tax. File online by 31 January after the end of the UK tax year in which you sold, and pay any CGT due by the same date.
Do I need to file a 60-day CGT return for Indian property?
No. The 60-day UK property CGT return applies to UK residential property, not overseas property. You report the sale of property in India through your normal Self Assessment return for the tax year of sale, with the gain on SA108 and the foreign tax credit claim on SA106.
Is Indian tax ever higher than the UK tax on the same sale?
Yes, often for inherited property or when the rupee has weakened a lot. The UK base cost for an inherited home is the value at death, while India uses the original owner's cost. If Indian tax exceeds UK tax, the UK bill falls to zero, but HMRC does not refund the excess.