Key points
- The gain is the sale price minus the purchase price, buying and selling costs, and improvements.
- The first £3,000 of gains in the tax year is tax-free. The rest is taxed at 18% in your basic rate band and 24% above it.
- For UK residential property, you must report and pay within 60 days of completion, through a UK property account.
- Repairs and running costs cannot be deducted from the gain. Improvements that remain at the date of sale can.
How the gain is worked out
| Sale price | £320,000 |
| Minus purchase price | −£200,000 |
| Minus stamp duty, legal fees and survey when you bought | −£8,000 |
| Minus estate agent and legal fees when you sold | −£5,000 |
| Minus improvements (an extension) | −£25,000 |
| Gain | £82,000 |
Improvements are things that add to the property, such as an extension or a new bathroom where there was none. Repairs, redecoration and replacing like with like are not improvements: they are claimed against rental income instead.
Rates and the annual exemption
Take off the £3,000 annual exempt amount. The rest of the gain is added on top of your other taxable income for the year: the part that fits in your basic rate band is taxed at 18%, the rest at 24%.
The £82,000 gain above, for a person with a £35,000 salary. Taxable gain: £79,000. Basic rate band left: £15,270, taxed at 18% (£2,749). The remaining £63,730 at 24% (£15,295). Capital Gains Tax: about £18,044.
The 60-day deadline
For UK residential property, a UK resident must report the sale on HMRC's online "Capital Gains Tax on UK property" service and pay the estimated tax within 60 days of the completion date. The sale also goes on your Self Assessment return for the year. Late reporting brings penalties and interest, even if your Self Assessment is on time.
If there is no tax to pay, for example because of a loss or reliefs, you usually do not need to report within 60 days. Non-residents must report every disposal of UK property, even with no gain.
If you ever lived there
If the property was once your main home, Private Residence Relief covers the years you lived there, plus the last 9 months of ownership. Lettings relief now applies only if you shared the home with your tenant. These reliefs can reduce the gain a lot, but the records of when you lived there matter.
Jointly owned property
A property owned with a spouse or civil partner is split by ownership share. Each owner has their own £3,000 exemption and their own basic rate band. Transfers between spouses are tax-free, so planning ownership before a sale can legitimately reduce the tax.
Capital Gains Tax calculator
What to prepare
0 of 5 ready
One piece of advice
Talk to an accountant before you exchange contracts, not after completion. Ownership, timing and reliefs can only be planned before the sale, and the 60-day clock leaves no time to fix anything afterwards.
Test yourself
1. You complete a sale of a UK buy-to-let on 15 March. When must you report and pay CGT?
60 days from completion.
2. Which can you deduct from the gain?
Improvements that add to the property can be deducted.
3. How much of your gains is tax-free in 2026/27?
The annual exempt amount is £3,000.
4. What is the higher rate of CGT on residential property?
18% in the basic rate band and 24% above it.
Law and sources
- GOV.UK: Capital Gains Tax on UK propertyThe 60-day report and payment
- GOV.UK: Capital Gains Tax rates and allowances18%, 24% and the £3,000 exemption
- Taxation of Chargeable Gains Act 1992, section 38Costs and improvements that can be deducted
- Finance Act 2019, Schedule 2Returns and payments on account for UK land disposals
- GOV.UK: Private Residence ReliefRelief for a property that was your home
This guide explains the rules in general terms as at 5 October 2026. It is not advice for your situation. Rules and rates change.
