Short answer
If you sell a UK residential property that has not been your only or main home for the whole time you owned it, you may owe Capital Gains Tax. For 2026/27 the rate is 18% on gains falling within the basic rate band and 24% above it, after an annual exempt amount of £3,000. UK residents must report and pay within 60 days of completion if tax is due.
Figures checked against GOV.UK and HMRC guidance.
How is Capital Gains Tax on a rental property worked out?
The gain is the sale price, less the costs of selling, less what you paid and the costs of buying, less capital improvements. Costs you can deduct include:
- Estate agent and solicitor fees on the sale
- Stamp Duty Land Tax, survey and legal fees on the purchase
- Improvements that are still reflected in the property, such as an extension (not repairs or redecoration)
You then deduct the £3,000 annual exempt amount. The rate depends on how much of your basic rate income tax band your income leaves unused. GOV.UK: tax when you sell property
Worked example, 2026/27
Assumptions: sole owner, UK resident, never lived in the property, salary of £30,000, no other gains in the year, sale completes in October 2026.
| Sale price | £260,000 |
| Less selling costs | (£5,000) |
| Less purchase price (2012) | (£150,000) |
| Less purchase costs | (£4,000) |
| Less extension added in 2018 | (£10,000) |
| Gain | £91,000 |
|---|---|
| Less annual exempt amount | (£3,000) |
| Taxable gain | £88,000 |
| £20,270 at 18% (unused basic rate band) | £3,648.60 |
| £67,730 at 24% | £16,255.20 |
| Capital Gains Tax | £19,903.80 |
The salary of £30,000 uses £17,430 of the £37,700 basic rate band, leaving £20,270. This tax would be reported and paid within 60 days of completion.
Which reliefs reduce Capital Gains Tax on a rental property?
Private residence relief
If the property was your only or main home at some point, the gain for that period is exempt, plus the final 9 months of ownership in most cases.
Lettings relief
Since 6 April 2020, lettings relief only applies where you lived in the property at the same time as your tenant. It no longer helps most former homes that were let after you moved out.
Joint ownership
Each owner has their own annual exempt amount and their own basic rate band. Transfers between spouses or civil partners who live together are on a no gain, no loss basis, which can change who pays the tax on a later sale. This needs care and timing.
When do I report and pay CGT after selling a property?
UK residents who sell a UK residential property with tax to pay must report it using a Capital Gains Tax on UK property account and pay the estimated tax within 60 days of completion. Non-UK residents must report every disposal of UK property or land within 60 days, even if no tax is due. The sale also goes on your Self Assessment return. GOV.UK: report and pay CGT on UK property
What we do
- Gather purchase, improvement and sale documents and calculate the gain
- Check private residence relief, lettings relief and losses available
- Plan timing and ownership before exchange, where it is not too late
- File the 60-day return and tell you exactly what to pay
- Report the disposal on your tax return and correct the estimate if needed
Fees
Capital Gains Tax work is quoted as a fixed fee. We quote per disposal once we have seen the purchase and sale figures and know whether any reliefs need checking. How our fees work.
Frequently asked questions
When does the 60-day clock start?
On the date of completion, not exchange of contracts.
Can I reduce Capital Gains Tax by transferring a share to my spouse?
Sometimes, because each spouse has an annual exempt amount and their own tax bands. The transfer must be genuine and outright, and it must happen before the sale is agreed in substance. Speak to us before you act.
Do I pay CGT if I give the property to my children?
Usually yes. A gift to a connected person is treated as a sale at market value, so there can be a tax bill with no sale proceeds to pay it from.
Official sources
- Tax when you sell property GOV.UK
- Capital Gains Tax rates GOV.UK
- Capital Gains Tax: what you pay it on, rates and allowances (allowances) GOV.UK
- Report and pay Capital Gains Tax on UK property GOV.UK
Figures were checked against these sources on . Tax rules change: check the source or ask us before acting.