Property Professionals
Capital gains tax on property: rates, 60-day reporting and planning a sale
How CGT works when you sell let or second-home property, including the 60-day return, reliefs and the planning that has to happen before exchange.
On this page10 sections
Key points
- 12026/27 CGT on property is 18% within the basic rate band and 24% above, with a £3,000 annual exempt amount
- 2UK residential gains must be reported and paid within 60 days of completion
- 3Lettings relief now applies only to shared occupancy, capped at £40,000
- 4Planning works best before contracts are exchanged
Selling a rental property can trigger a large capital gains tax bill, and the clock starts at completion. We help landlords and property owners understand the gain before they sell, choose the best ownership and timing, and get the 60-day return right.
Who this is for
- Landlords thinking about selling one or more properties.
- People who inherited a property or are selling a former home they have let.
- Owners of second homes, including those moving abroad.
- Families considering gifting or restructuring property.
- Anyone who has sold and is unsure about the 60-day return.
How CGT works on property
CGT is charged on the gain, not the sale price: sale proceeds less what you paid and allowable costs. In 2026/27 an individual pays:
- 18% on gains within the unused part of the basic rate band, and
- 24% on gains above it.
The annual exempt amount is £3,000. For trustees and personal representatives the rate is 24% and the allowance is lower. Companies pay corporation tax on gains instead.
The key practical rule is the deadline. A UK resident who sells UK residential property must report the gain and pay the tax within 60 days of completion, through a separate service from Self Assessment. There is no return to file if no CGT is due. A non-resident has to report all UK property disposals within 60 days even if there is no tax. We explain the sequence in our 60-day CGT series.
Reliefs and the limits people forget
Private residence relief
If the property was ever your main home, part of the gain may be exempt. The final nine months of ownership always count, and some periods of absence are treated as occupation. Relief is time-apportioned, and you should nominate your main residence when you have more than one home.
Lettings relief
Lettings relief has been much narrower since April 2020. It applies only if you shared your home with a tenant and lived in it at the same time, and it is capped at £40,000. If you let the whole home while living elsewhere, it is no longer available.
Other reliefs
Gift holdover relief is generally not available for let residential property, and Business Asset Disposal Relief does not apply to property letting. Incorporation relief is covered on our Property Portfolio Incorporation page. Former furnished holiday lets lost their special reliefs when the regime ended in April 2025.
Planning ideas worth testing
| Idea | What it does | Watch out for |
|---|---|---|
| Ownership between spouses | Uses two sets of allowances and bands | The transfer must be genuine |
| Timing across tax years | Uses two annual exempt amounts | Disposal date is exchange, not completion |
| Using losses | Sets losses against gains in the same year | Claim deadlines and connected-party limits |
| Selling in a company | Corporation tax instead of CGT | Extraction costs on the proceeds |
| Holding until death | Uplift in base cost | Inheritance tax may apply |
Planning a sale step by step
The best CGT planning happens before contracts are exchanged. We usually work through these questions with you:
- Who really owns it? Legal and beneficial ownership can differ, and the gain follows beneficial ownership. If a spouse or civil partner owns part of the property, their allowances and bands count too.
- What is the gain? We rebuild the figure from your purchase documents, improvement invoices and sale costs. Gaps in the paperwork are common, and finding them early avoids a weak computation.
- Which tax year is the exchange in? The disposal date is exchange, so a short delay can move a gain into a new year with a fresh annual exempt amount and basic rate band.
- Are there losses to use? Losses on other disposals in the same year come off first, and losses carried forward only come off down to the annual exempt amount.
- What will you do with the proceeds? Cash flow matters. The CGT is due within 60 days of completion, not at the next tax return, so you need the money set aside.
Gifts, family and death
Giving a property to a child or another relative is a disposal at market value, so tax can arise on a gift that produces no cash. There may also be SDLT if there is a mortgage, and inheritance tax if the donor survives less than seven years. By contrast, on death there is no CGT, and the property passes to the personal representatives at its value at the date of death. That uplift can be the deciding factor in whether to sell or hold. Our inheritance tax planning work looks at the whole picture, and our article on transferring property to a family member is a useful primer.
Common mistakes
- Missing the 60-day deadline, or not filing because the gain "was covered".
- Using the wrong disposal date when planning around tax years.
- Assuming lettings relief or a gift relief still applies.
- Not keeping receipts for improvements.
- Transferring a mortgaged property to a spouse or child without checking SDLT.
- Selling a portfolio in a single year without considering the 24% band.
How we help
We build the gain computation with you, test the planning options and tell you what the likely tax is before you sign anything. We prepare and file the 60-day return and any related Self Assessment entries, and work with your accountant and conveyancer. If you are selling as part of a wider move, for example emigrating, we align it with the residence position on our leaving the UK page. For landlords selling to buy through a company, see Property Portfolio Incorporation. Private clients with other assets can also see our Capital Gains Tax Advice.
If a return has been missed, see HMRC Enquiries. The detailed landlord toolkit and calculators are on our specialist site, propertytaxadvisory.co.uk.
Why ASWATAX
You work directly with a Chartered Tax Adviser, and we advise from a commercial perspective, thinking about cash flow and what you want to do with the proceeds. We have more than 15 years' experience and have advised over 300 clients.
Talk to us
If you are thinking of selling, ideally speak to us before you exchange contracts. The first call is free. Book a call or contact us.
01 · Guide in progress
The Property Sale Tax Guide
A step-by-step guide to working out the gain on a property sale, the 60-day return and the planning options available before exchange.
Talk it through instead
Our The Property Sale Tax Guide is being written. In the meantime, a 20-minute call with a Chartered Tax Adviser is free.
Book a free callWe reply the same working day.
Often handled together.
- ServiceProperty Portfolio IncorporationHow to move rental property into a limited company, and when the CGT, SDLT, mortgage and Section 24 trade-offs make it worth doing.Read the page
- ServiceNon-UK Resident LandlordsHow the Non-Resident Landlords Scheme, UK gains reporting, the SDLT surcharge and company structures work for people who own UK property from abroad.Read the page
- Private FamiliesCapital Gains Tax AdvicePersonal capital gains tax advice for families selling, gifting or transferring property, shares and investments, with the planning done before the deal completes.Read the page
- ServiceHMRC EnquiriesHow we handle HMRC enquiries and disclosures for landlords: undeclared rent, missed CGT returns, SDLT checks and the Let Property Campaign.Read the page
From the journal.
Questions, answered.
Straight answers to what clients ask us most. Your own situation may differ, so treat them as a starting point.
Q1What are the CGT rates on selling a rental property in 2026/27?
Individuals pay 18% on the part of the gain that fits inside their unused basic rate band and 24% on the rest. Trustees and personal representatives pay 24%. The rates are the same for residential property and most other assets. Your other income for the year decides how much of the basic rate band is left, so the order of income and gains matters.
Q2How much of a property gain is tax-free each year?
The annual exempt amount for individuals is £3,000 in 2026/27 and £1,500 for most trusts. It is use-it-or-lose-it and cannot be carried forward. If you and your spouse or civil partner own the property jointly, each can use their own £3,000 against their share of the gain, which is one reason ownership planning matters.
Q3How do I report and pay CGT within 60 days of selling UK property?
If you sell UK residential property and there is tax to pay, you must report the gain and pay the CGT within 60 days of completion, using HMRC's CGT on UK property service rather than your Self Assessment return. Late filing and payment bring penalties and interest. If you are registered for Self Assessment, the sale must also be included on your annual return.
Q4Do I need a 60-day return if there is no CGT to pay?
For UK residents, no return is needed if no tax is due, for example where the gain is within your annual exempt amount or covered in full by private residence relief. Non-residents are different: they must report all UK property disposals within 60 days even if there is a loss or nothing to pay. We usually check the numbers before deciding.
Q5What is the CGT calculation on a buy-to-let sale?
The gain is the sale price less the purchase price, less allowable costs: purchase and sale legal and agent fees, SDLT and the cost of improvements such as an extension. Routine maintenance and decorating are not deductible. Where the property was inherited or gifted, the starting value is different. Good records of what was spent and when make a significant difference.
Q6Can I claim private residence relief on a property I used to live in?
Yes, for the periods it was your main home, plus the final nine months of ownership, which always qualify even if you have moved out. Other periods of deemed occupation can apply, for example up to three years for any reason or time spent working abroad, subject to conditions. If the property was your home for only part of ownership, relief is apportioned.
Q7Is lettings relief still available when I sell?
Only in a narrow case. Since 6 April 2020, lettings relief applies only where you shared your home with a tenant while you lived there. It does not apply when the whole property was let. Where it applies, it is capped at the lowest of the private residence relief, £40,000 and the gain from the letting. Most landlords no longer qualify.
Q8Can I use my spouse's allowances to reduce CGT?
Spouses and civil partners living together can transfer assets between them with no gain and no loss. A transfer before a sale means the lower earner can use their basic rate band and their own £3,000 annual exempt amount. It must be a real transfer with the beneficial ownership passing, and it carries SDLT and mortgage points, so we check the full picture.
Q9When does the sale date count for CGT purposes?
The disposal date for CGT is when contracts are exchanged, or when conditions are met in a conditional contract, not when the sale completes. The 60-day return deadline, however, runs from completion. This distinction matters for which tax year the gain falls in, and so for rates, allowances and the basic rate band.
Q10Can I use capital losses against a property gain?
Yes. Losses in the same tax year are set against gains first. Losses from earlier years are carried forward and used only to reduce gains to the annual exempt amount. You must claim a loss within four years of the end of the tax year of the disposal. Losses on sales to connected persons are restricted.
Q11How is CGT calculated if I give a property to a family member?
A gift to someone other than your spouse is treated as a sale at market value, so tax may arise even though no money changes hands. Business-asset gift holdover relief is generally unavailable for let residential property. The gift may also have SDLT consequences if there is a mortgage, and inheritance tax implications. Planning gifts needs all three considered together.
Q12What happens to CGT when someone dies owning rental property?
There is no CGT on death. The property is not disposed of by the deceased, and the personal representatives take it at its market value at the date of death. This 'uplift' wipes out the gain built up to that point, though inheritance tax may apply. It can make holding a property until death, rather than gifting it during life, attractive for CGT purposes.
Q13If I sell several properties together, is the tax different?
Each property is a separate disposal for CGT, with its own gain or loss, and losses on one can be offset against gains on another in the same tax year. The sale of several at once can push more of the gain into the 24% band and means several 60-day returns. Timing across tax years or ownership can significantly change the result.
Q14How does a limited company pay tax on selling property?
A company pays corporation tax on the gain, at 19% to 25% depending on profits, with no annual exempt amount. Indexation allowance was frozen at December 2017. There is no 60-day return for companies; the gain is reported in the company tax return. Extracting the proceeds from the company can lead to a second layer of tax.
Q15What if I sold a property and forgot the 60-day return?
Report it now. HMRC charges a penalty for late filing and interest on late payment, and the amounts rise the longer it is left. A prompt voluntary correction normally leads to a lower penalty than waiting for HMRC to contact you. We help you prepare the return and, where needed, a disclosure that explains why it was late.
05 · Next step
Talk it through with Omar.
The first call is free. You'll speak to a Chartered Tax Adviser, and leave with a clear view of your options.
We reply the same working day.
