The US side: FIRPTA at closing, then a real return
Under Article 13 of the UK-US double tax treaty, the country where the land sits taxes the gain first. The mechanics start at closing: the buyer must withhold 15% of the amount realised (broadly the gross price) and pay it to the IRS, with reduced rates of 10% or nil where an individual buyer will use the property as a residence and the price falls under the $1,000,000 or $300,000 thresholds. Because 15% of gross can far exceed the tax on a modest gain, you can apply on Form 8288-B before closing for a reduced or nil withholding. Either way the withholding is only a deposit: the real US tax on the gain is settled on Form 1040-NR for the year of sale, where the FIRPTA amount is credited and any excess refunded. State tax may apply on top depending on where the property is.
The UK side: worldwide gains, computed in sterling
As a UK resident you pay UK Capital Gains Tax on worldwide gains, so the same sale goes on your Self Assessment return: the SA108 capital gains pages plus the SA106 foreign pages for the credit claim. For 2026/27 residential property gains are taxed at 18% within your remaining basic-rate band and 24% above it, after the £3,000 annual exempt amount. The trap is currency. HMRC requires the gain to be computed in sterling, with proceeds translated at the completion-date rate and each cost at the rate on its own date; you cannot just convert the dollar gain once. If sterling weakened over your ownership, the UK taxable gain can exceed the economic dollar profit. If you recently arrived in the UK, check whether a FIG regime claim could take the gain out of UK tax for that year before assuming the default.
Credit relief stops the double charge
You claim Foreign Tax Credit Relief on the UK return for the US federal and any state tax finally due on the gain. The credit is capped at the lower of the US tax paid and the UK tax on that same gain, so if the US charge is bigger the surplus is not refunded by HMRC, and only the settled tax from your 1040-NR counts, not the raw FIRPTA withholding. The two filing cycles rarely line up, US calendar year against UK year to 5 April, so start the US side early to have final figures for the 31 January UK deadline. Horizon handles the UK reporting and the credit claim on a fixed fee agreed upfront, with non-resident and expat returns from £550, and the US filings are handled by our US partners (Enrolled Agents and CPAs), whom we coordinate for you; book a free clarity call at /book before you exchange.