Table of Contents

• Introduction to CGT Payment on Account UK Property

• When Is CGT Payment on Account UK Property Required?

• Why Is the CGT Payment on Account an Estimate?

• How to Estimate CGT Payment on Account

  • Make a Best Estimate of the Gain

  • Applying Losses to Your CGT Estimate

  • Using the Annual Exempt Amount (AEA)

  • Determining CGT Rates Based on Income

• Further Guidance and Next Steps

Introduction to CGT Payment on Account UK Property

If you’ve disposed of UK residential property, you're not only required to report the gain, you also need to make a CGT payment on account UK propertywithin 60 days of completion. This is a key part of the wider CGT reporting compliance regime.

In this second part of our 3-part blog series, we explain how to calculate and make this payment accurately, using the best available information at the time.

When Is CGT Payment on Account UK Property Required?

You must make a payment on account unless:

• the disposal results in a loss - which means no tax is payable, or

• the amount due has not yet become payable as a result of a previous return.

FA 2019, Sch 2, Part 1, paras 6, 9

This payment is based on a best estimate of the CGT due, referred to in FA 2019, Schedule 2 as the "notionally chargeable" amount.

Why Is the CGT Payment on Account an Estimate?

At the time of completion, you might not know all the details required to calculate the final CGT liability. For example:

• You could realise additional capital losses later in the year.

• Your taxable income might change, affecting which CGT rate applies.

How to Estimate CGT Payment on Account

Make a Best Estimate of the Gain

Make a Best Estimate Calculate the gain as accurately as possible using the information you have at the time. If a relief like Private Residence Relief (PPR) is likely to apply, you can include it. Even if you haven’t submitted a claim yet, it must be reasonable to expect that you will.

Applying Losses to Your CGT Estimate

• Offset brought-forward losses against the gain.

• Use current-year losses that arise before completion (even if not yet reported).

• You cannot use losses that arise after completion in your 60-day CGT return.

Using the Annual Exempt Amount (AEA)

Using the Annual Exempt Amount (AEA) Yes, the Annual Exempt Amount is available, but it can only be used once and must be applied efficiently. You may adjust this at year-end during your Self Assessment.

Determining CGT Rates Based on Income

Determining CGT Rates Based on Income The CGT rate depends on your total taxable income for the year. Estimate how much of your basic rate band is still available to determine whether the gain is taxed at 18% or 28% (for residential property).

Further Guidance and Next Steps

➡️ Need to fix or amend your return or payment? We explain how in Part 3 of our CGT series.

⬅️ New to the 60-day CGT rule? Start with Part 1 of our CGT series.

Meet Omar Omar is a Chartered Tax Advisor (a.k.a an expert on tax issues) and founder of ASWATAX. He regularly shares his knowledge and best advice here in his blog and on other channels such as LinkedIn. Book a call today to learn more about what Omar and ASWATAX can do for you.

*Disclaimer: ASWATAX is a firm of Chartered Tax Advisors, and we strive to provide accurate, up-to-date tax insights. Tax laws may change, so this content is for general guidance only and not a substitute for professional advice. Seek independent tax and legal counsel before making decisions. ASWATAX is not liable for any loss from reliance on this information. Use at your own risk.