From 30 October 2024, Capital Gains Tax on UK residential property is charged at 18 per cent for gains falling within your remaining basic rate income tax band, and 24 per cent for gains above that threshold. These rates replaced the previous higher rate of 28 per cent following the Autumn Budget 2024. The rate that applies depends on the size of the gain and your other taxable income in the same tax year.

The annual exempt amount for individuals in 2024/25 is £3,000. This is deducted from your total taxable gains before CGT is calculated. If you have gains from other assets in the same year, they reduce this allowance first. The exempt amount has fallen significantly in recent years: it was £12,300 in 2022/23 and was cut to £6,000 in 2023/24 before the further reduction to £3,000.

Private Residence Relief (PPR) exempts the portion of your gain that corresponds to the period you lived in the property as your main residence. If you lived there for 60 per cent of your total ownership period, 60 per cent of the gain is exempt. The final 9 months of ownership always qualify for relief, regardless of whether you were in residence during that period, to allow time for the property to sell. If you lived in the property for the entire ownership period, the full gain is exempt and no CGT is due.

Lettings relief was significantly restricted from April 2020. It now applies only where the owner lived in the property at the same time as the tenant, i.e. as a lodger arrangement. If you rented the property out while living elsewhere, lettings relief does not apply. For most buy-to-let landlords who have never lived in the property, lettings relief is not available. PPR relief may still apply if you lived in the property before letting it.

The chargeable gain is the sale price minus the original purchase price, minus allowable costs. Allowable costs include solicitor and estate agent fees paid on both purchase and sale, and costs of improvement works (not repairs or maintenance). Mortgage interest and routine repairs cannot be deducted from the capital gain, though they may have been deductible against rental income during the letting period. The annual exempt amount is then deducted from the resulting figure before tax is applied.

UK residents who sell a UK residential property and have a CGT liability must report the gain and pay the tax owed within 60 days of completion. This is done through HMRC’s online Capital Gains Tax on UK property service, separate from Self Assessment. If the property is also reported in your Self Assessment return, any over- or under-payment is reconciled at that point. Missing the 60-day deadline results in automatic late filing penalties starting at £100.

Yes, but only capital improvements, not repairs. Improvement costs are expenditure that adds value to the property beyond its original state: an extension, a loft conversion, or a new kitchen where none existed. Repairs and maintenance that restore the property to its original condition, such as repainting, fixing a broken boiler, or replacing worn carpets, are not deductible from the capital gain. Keep receipts and invoices for any improvement work as HMRC may request evidence.

No. Indexation allowance, which previously allowed individuals to increase their base cost in line with inflation to reduce the nominal gain, was removed for individuals and trusts in April 1998. It remains available for companies but not for individual landlords. The gain on a property held since before 1998 is calculated using the actual purchase price, not an inflation-adjusted figure. Holdover relief and rollover relief are also not available on disposals of residential let property.

Yes. Non-UK residents are subject to CGT on disposals of UK residential property under the Non-Resident Capital Gains Tax (NRCGT) rules, which have applied since April 2015. Non-residents must report the disposal within 60 days of completion regardless of whether a gain arises, and pay any tax owed within the same window. The gain is calculated only on the increase in value since 5 April 2015, unless the non-resident elects to use the full gain from acquisition. The 18 per cent and 24 per cent rates apply in the same way as for UK residents.

No. Rollover relief, which defers a capital gain when the proceeds are reinvested in a qualifying replacement asset, is not available for residential letting property. It applies to assets used in a trade, such as commercial premises, plant, and machinery. A buy-to-let property is an investment asset, not a trading asset, so the gain crystallises on disposal and cannot be rolled into a replacement property. Each sale is a separate chargeable event for CGT purposes.