Selling a flat in Bengaluru, land in Gujarat or a portfolio of Indian shares is common once people settle in the UK, often to fund a UK home deposit. If you're UK tax resident when you sell, the UK will usually want to know about it, even if India has already taxed the gain.
Quick summary
- UK residents are taxed on worldwide capital gains, including Indian property and shares.
- The UK gain is calculated in pounds: cost at the purchase-date exchange rate, proceeds at the sale-date rate.
- Indian tax on the same gain can usually be credited against UK tax.
- Indian mutual funds are often taxed as income in the UK, not as capital gains.
- Recent arrivals may be able to use the 4-year FIG regime.
- Timing matters: selling before you become UK resident, or within your FIG window, can change everything.
UK capital gains tax rates (2025/26 and 2026/27)
| Rate | |
|---|---|
| Gains within your unused basic-rate band | 18% |
| Gains above the basic-rate band | 24% |
| Annual exempt amount | £3,000 |
These rates have applied to all assets, including residential property, since 30 October 2024. See gov.uk CGT rates.
Why the exchange rate can shrink your UK gain
The UK calculates the gain in pounds. Because the rupee has weakened against the pound over time, the UK gain is often much smaller than the rupee gain that Indian tax is based on.
Example: Sanjay bought a flat in Pune in 2012 for ₹50,00,000, when £1 was about ₹85, so his UK cost is about £58,800. He sells in 2026 for ₹1,20,00,000, when £1 is about ₹112, so his UK proceeds are about £107,100.
| Rupees | Pounds | |
|---|---|---|
| Sale price | ₹1,20,00,000 | £107,100 |
| Purchase cost | ₹50,00,000 | £58,800 |
| Gain | ₹70,00,000 (about £62,500 at today's rate) | £48,300 |
His UK gain is about £14,000 lower than a straight conversion of the rupee gain would suggest. Allowable costs on both sides (stamp duty, registration, legal fees, brokerage and improvement costs) reduce the gain further. Convert each at its own date.
How Indian tax and UK tax interact
India usually taxes gains on Indian property. When a non-resident sells, the buyer must deduct TDS, often at a high rate, and you then file an Indian return to settle the actual liability. India changed its capital gains rules in July 2024, so ask an Indian CA to confirm the current rates for your sale.
The UK then taxes the same gain (if you're UK resident), but gives foreign tax credit relief:
- the credit is the lower of the Indian tax on that gain and the UK tax on that gain;
- if Indian tax exceeds the UK tax, the excess isn't refunded by HMRC;
- if Indian TDS was more than your final Indian liability, reclaim it through your Indian tax return. Only the final Indian tax is creditable.
Continuing the example: Sanjay is a higher-rate taxpayer. His UK CGT is (£48,300 − £3,000) × 24% ≈ £10,870. If his final Indian tax on the sale is the equivalent of £9,000, he pays about £1,870 more in the UK. If Indian tax was £12,000, he pays nothing more in the UK, but doesn't get the £1,130 difference back.
Special points to check
Your former home in India
If the flat was your main home before you moved, private residence relief may reduce the UK gain for the period you lived there. Special rules apply to overseas homes and non-resident periods, so this needs careful working.
Inherited property
For UK purposes, your cost is generally the market value at the date of death, not what your parents originally paid. Get a valuation as at that date if you can.
Jointly owned property
Each owner is taxed on their own share of the gain. Joint ownership with a spouse can mean two annual exempt amounts and two basic-rate bands.
Indian shares
Direct shareholdings (for example, through a demat account) are normally within UK capital gains tax on sale. Dividends are taxable as dividend income each year (£500 dividend allowance; rates in 2026/27 of 10.75% / 35.75% / 39.35%).
Indian mutual funds: the big trap
In the UK, Indian mutual funds are usually "offshore funds". Unless a fund appears on HMRC's list of reporting funds (most Indian retail funds don't), any gain on disposal is an "offshore income gain":
- taxed at income tax rates (20% / 40% / 45%), not CGT rates;
- no annual exempt amount;
- losses can't be offset against these gains in the usual way.
Holding Indian mutual funds while UK resident can be much more expensive than people expect. Get advice before selling large holdings, and consider whether to keep holding them at all.
Reporting the sale
- Gains on Indian property and shares go on the capital gains pages of your Self Assessment return (and the foreign pages for any credit claimed).
- The UK 60-day property return applies to UK residential property, not Indian property.
- Mutual fund offshore income gains are reported as foreign income.
- Keep the sale deed, purchase deed, TDS certificates (Form 16B), Indian return and computation, and the exchange rates used.
Should I sell before or after moving, or claim FIG?
| Your situation | Things to consider |
|---|---|
| Not yet UK resident | Selling before you become resident may keep the gain outside UK tax entirely. Check the split-year rules if you're moving mid-year. |
| Recently arrived (10+ years non-resident before) | A sale within your FIG window may be fully relieved, at the cost of your personal allowance and CGT exemption that year. |
| Resident for 4+ years | UK CGT applies, with Indian tax credited. Plan the timing within the tax year, and use both spouses' allowances if jointly owned. |
Moving the proceeds to the UK
Bringing the sale proceeds to the UK is not a separate taxable event. But you'll need the paperwork for your Indian bank (Form 15CA/15CB) and for your UK mortgage lender and solicitor. See moving money from India to buy a UK home.
Free download: Moving from India? UK Tax Checklist
Selling soon? Book a free 20-minute overseas income review and we'll model the UK tax before you sign.
Related: FIG regime · Double taxation relief
Figures are illustrative and rounded. General information, not personal advice. Indian capital gains tax rates and TDS procedures should be confirmed with an Indian chartered accountant.
Overseas income service: fixed-fee pricing for residence, Indian income, FIG claims and foreign tax credit is on our overseas income page.
Related: selling US company RSUs or ESOPs after moving from India is covered in RSUs, ESOPs and the FIG regime.