Capital Gains Property UK

Overview

Calculate Capital Gains Property UK using the official rates and regulations for United Kingdom.

How it works

Enter the base amount and the calculator will apply the relevant rates and brackets to compute the result.

Capital Gains Tax on Property in the UK

Capital Gains Tax on property applies when you sell or dispose of a property that is not your main home and make a profit. This includes buy-to-let properties, second homes, holiday lets, and commercial properties. The gain is calculated as the difference between the purchase price (plus allowable costs) and the sale price. For the 2024-25 tax year, the CGT rates on residential property are 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers. These rates increased from the previous 28% for higher rate payers but the annual exempt amount was also reduced to £3,000, meaning more gains are now caught within the tax net than before.

Private Residence Relief

Your main home is normally exempt from CGT through Private Residence Relief (PRR). You are entitled to full relief for any period during which the property was your only or main residence. If you have more than one home, you can nominate which one qualifies for PRR within two years of acquiring the second property. PRR also provides relief for the final 9 months of ownership regardless of whether you lived there during that period. If you let part of your home, you may be entitled to Letting Relief of up to £40,000, though this only applies if you shared occupancy with the tenant. Periods of absence for work or other reasons may also qualify for relief if certain conditions are met.

Calculating Property Gains

To calculate your property gain, start with the sale price and deduct the original purchase price, stamp duty land tax, legal fees for purchase and sale, estate agent fees, and capital improvements such as extensions or new kitchens. Routine maintenance, decorating, and repairs are not allowable deductions. If you inherited the property, the market value at the date of death is used as the base cost. For properties owned before April 1982, the market value at 31 March 1982 can be used instead of the original purchase price. Time apportionment may apply if the property was not always your main residence, with the taxable gain calculated based on the proportion of ownership periods that do not qualify for relief.

Reporting Requirements Since 2020

Since April 2020, UK residents must report and pay CGT on UK residential property disposals within 60 days of completion. This is done through the HMRC CGT on UK property account, which requires details of the property, purchase and sale prices, allowable costs, and calculations. A payment on account must be made at the time of reporting, with any adjustment made through your Self Assessment return. Non-compliance with the 60-day deadline can result in penalties starting at £100 for missing the deadline, with additional daily penalties for continued failure. The requirement applies even if you have no tax to pay after reliefs and the annual exempt amount.

Strategies to Minimise Property CGT

Several strategies can help reduce your property CGT liability. Timing disposals across tax years can maximise the use of annual exempt amounts. Transferring property to a spouse or civil partner before disposal allows both individuals to use their annual exempt amount and potentially access lower tax bands. Making capital improvements before sale increases allowable costs and reduces the gain. If you are selling a furnished holiday let, you may qualify for Business Asset Disposal Relief at 10% rather than the higher residential property rates. Consider whether the property qualifies for any specific reliefs such as Private Residence Relief for periods of actual occupation or the 9-month final period exemption.

Reporting and Payment Deadlines for UK Property CGT

Since April 2020, UK residents selling residential property must report and pay Capital Gains Tax within 60 days of completion. This accelerated reporting requirement replaced the previous system where CGT was settled through annual Self Assessment. Failure to report on time incurs penalties starting at £100 for missing the deadline, with additional daily charges accruing after six months. The report is filed through HMRC's online Capital Gains Tax on UK Property service, which calculates the tax due based on the information provided about disposal proceeds, allowable costs, and applicable reliefs.

Principal Private Residence Relief and Letting Relief

Principal Private Residence (PPR) relief remains the most significant exemption for property CGT. If the property was your only or main home throughout the entire period of ownership, the gain is fully exempt. However, partial relief applies when the property was not your main residence for some periods, such as when it was rented out or used as a second home. Letting relief can further reduce the taxable gain by up to £40,000 for periods when a room or the entire property was let, though since April 2020 this relief only applies if the owner shared occupancy with a tenant. The final nine months of ownership are automatically deemed as a period of occupation regardless of actual residence, providing a small additional exemption window.