Capital Gains Tax on property

You may have CGT to pay when you dispose of a UK residential property that isn’t fully exempt, most commonly second homes, buy-to-lets, inherited properties you didn’t live in, or homes partly used for business. Your main home is usually covered by Private Residence Relief (PRR), but relief can be restricted if, for example, you’ve let out all or part of the property, used part of it exclusively for business, or the garden/grounds exceed permitted limits.

Tip: If you own more than one home, PRR rules can be nuanced. Check HMRC guidance on selling a home and PRR to understand what relief you can claim.

For UK residential property sold on or after 27 October 2021, you must report and pay any CGT within 60 days of completion via HMRC’s Capital Gains Tax on UK property account. This is separate from your Self Assessment return; you’ll still include the disposal in SA100/SA108 at year-end. Missing the 60-day deadline can trigger interest and penalties.

• Who files? Each owner reports their own share of the gain.
• Non-residents must report all UK property disposals within the deadline, even with no tax to pay.

From 6 April 2025, residential property gains above your available basic-rate band are charged at 24%; gains within your basic-rate band are charged at 18%. The Annual Exempt Amount (AEA) is £3,000 for 2025/26 (it was also £3,000 in 2024/25). These rates and the AEA apply per individual; spouses/civil partners can both use their allowances.

Why your income matters: the CGT rate you pay depends on where the taxable part of your gain sits relative to your income tax bands for the year. HMRC’s Capital Gains Tax: rates and allowances page shows the bands and examples.

CGT is charged on your gain, not the sale price.

Start with:

Proceeds
– minus Allowable costs of acquisition and disposal
– minus Capital improvement costs
– minus Capital losses brought forward or in-year
– minus Annual Exempt Amount (if available)

Allowable purchase/sale costs typically include stamp duty, legal/conveyancing and estate agent fees. Capital improvements (e.g., an extension) can be added to your base cost; general maintenance/repairs and mortgage interest aren’t allowable against CGT. Keep evidence (invoices, completion statements). HMRC explains the calculation and what you can deduct.

If the property was your only or main residence, PRR can exempt all or part of the gain. Relief usually covers periods you lived there plus a final 9 months of ownership, even if you’d moved out (different limits can apply in specific circumstances, e.g., certain care-home/disabled cases). PRR can be restricted for periods of full letting or exclusive business use. Check HMRC’s guidance to see how much relief you can claim.

1. Within 60 days of completion:
   • Create/sign in to HMRC’s UK property CGT account and report the disposal; pay any CGT due by the same deadline. HMRC will ask for dates, values, and your allowable costs/reliefs.
2. At year-end via Self Assessment:
   • Include the disposal on SA100 + SA108.
   • Ftax helps here: complete your Self Assessment with built-in checks and clear prompts so your property disposal is correctly reflected in your overall tax position, alongside other gains, losses, dividends, and income. (Use HMRC’s property account for the 60-day report; use Ftax to finish the year-end SA100/SA108 accurately.)

Hold onto: purchase and sale contracts, completion statements, SDLT receipt, legal/agent invoices, improvement invoices, dates you lived in the property, and rental periods (if any). You’ll need these for the 60-day calculation and your Self Assessment. HMRC lists what information is required when you report.

• Missing the 60-day deadline. Interest/penalties can apply; set a reminder for completion day.
• Claiming non-allowable costs. Routine repairs and mortgage interest don’t reduce CGT; don’t mix them in.
• Forgetting PRR evidence. Keep proof of occupancy to support any relief claimed.
• Not reflecting the disposal in Self Assessment. Even after the 60-day report, SA100/SA108 must still include the sale.

• Report property gains within 60 days using HMRC’s UK property account.
• Finish the year-end return in Ftax (SA100 + SA108) with clear guidance and validations tailored for individuals, landlords, and small business owners.
• Need broader help? See our Self Assessment Hub, Landlords: Self Assessment, or Capital Gains for businesses hubs for step-by-step guidance.