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By If you’re a landlord in the UK, selling a property could mean you owe Capital Gains Tax (CGT). Many property owners are caught out by the rules, deadlines, and exemptions, leading to unexpected HMRC penalties.
At TT Accountancy Services (TTAS), we specialize in helping landlords and property investors stay tax compliant while maximizing their returns. Here’s your simple guide to Capital Gains Tax for UK landlords.
What is Capital Gains Tax (CGT)?
Capital Gains Tax is a tax on the profit you make when selling an asset that has increased in value. For landlords, this typically applies when selling:
- Buy-to-let properties
- Second homes
- Holiday rentals
Note: You usually don’t pay CGT when selling your main home if it qualifies for Private Residence Relief (PRR).
Current CGT Rates for Landlords (2024/25 Tax Year)
As of April 2024:
- Basic-rate taxpayers pay 18% on gains from residential property
- Higher/additional-rate taxpayers pay 24% on gains from residential property
Other assets are taxed at 10% or 20%, but residential property gains carry these higher rates.
See HMRC Capital Gains Tax rates
Allowances and Reliefs
1. Annual Exempt Amount (AEA)
For 2024/25, the CGT allowance is £3,000 per individual. This means the first £3,000 of your gain is tax-free.
2. Private Residence Relief (PRR)
If you lived in the property as your main home for part of the ownership period, you may qualify for PRR on that portion.
3. Lettings Relief
Limited relief may apply if you let out part of your home while also living there.
Reporting and Deadlines
Landlords must report and pay CGT within 60 days of completion of the property sale. Missing this deadline can result in:
- Penalties
- Interest charges on late payments
Report Capital Gains Tax on UK property
Example: How CGT Works
- Bought buy-to-let property in London for £200,000
- Sold property in 2025 for £350,000
- Gain = £150,000
- Deduct allowance (£3,000) → Taxable gain = £147,000
- If higher-rate taxpayer → 24% of £147,000 = £35,280 CGT owed
How to Reduce Your CGT Bill
- Use your annual exemption before year-end
- Transfer property ownership between spouses to utilise both allowances
- Keep detailed records of property improvements (these can reduce your gain)
- Seek professional tax planning advice before selling
How TT Accountancy Services Can Help Landlords
At TTAS, we help landlords and property investors with:
- Calculating Capital Gains Tax
- Claiming all eligible reliefs
- Filing CGT returns within 60 days
- Long-term tax planning for property portfolios
Contact TT Accountancy Services today for expert advice on property taxation.
Capital Gains Tax is a key consideration for UK landlords selling property. By understanding the rules and deadlines — and working with an accountant — you can stay compliant, reduce your tax bill, and protect your profits.
With TTAS by your side, you’ll have peace of mind knowing your property tax matters are handled correctly and efficiently.
