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Capital Gains Tax

Navigate capital gains tax with confidence. Expert guidance on CGT calculations, reliefs, disposal strategies, and tax-efficient property investment planning.

CGT on Property Disposals

When you sell a residential property that is not your main home, capital gains tax applies to the profit — the difference between the sale price and your acquisition cost (including allowable purchase costs, improvement expenditure, and selling fees). For the 2026/27 tax year, residential property gains are taxed at 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers.

The rate that applies depends on your total taxable income in the year of disposal. If the gain, when added to your other income, falls within the basic-rate band, the portion within that band is taxed at 18% and the remainder at 24%. Timing a disposal to fall in a lower-income year can therefore reduce the effective CGT rate.

Principal Private Residence Relief

Principal private residence (PPR) relief exempts gains on the sale of your main home from CGT entirely. If you have lived in the property as your only or main residence for the entire period of ownership, the full gain is exempt. Where you lived in the property for part of the ownership period, the gain is apportioned — and the final nine months of ownership are always treated as deemed occupation, regardless of whether you lived there.

Nominating which property is your main residence is critical for landlords who own multiple properties. HMRC allows a nomination within two years of acquiring a second property. Strategic nomination can maximise PPR relief on the property with the largest expected gain.

Lettings Relief

Lettings relief applies where a property that qualifies for PPR relief has also been let as residential accommodation. Since April 2020, lettings relief is only available if you shared occupation of the property with your tenant — simply letting out a former home no longer qualifies.

Where it does apply, the relief is capped at the lower of: £40,000, the amount of PPR relief given, or the gain attributable to the letting period. In practice, this relief now benefits very few landlords, but it remains relevant for those who let rooms in their own home or live in part of a property they also let.

Annual Exempt Amount and Tax-Free Allowance

Every individual has an annual exempt amount (AEA) for capital gains — currently £3,000 for the 2026/27 tax year. Gains up to this threshold are tax-free. The AEA cannot be carried forward to future years, so if you do not use it, it is lost.

For couples who jointly own investment properties, each person has their own £3,000 AEA, giving a combined £6,000 exemption. Transferring a share of a property to a spouse before sale (which is a no-gain, no-loss event) can therefore double the tax-free allowance available on the disposal.

CGT Reporting and the 60-Day Rule

Since April 2020, UK residents who sell a residential property at a gain must report the disposal and make a payment on account of CGT within 60 days of completion. This applies to all residential property disposals where CGT is due — including buy-to-let sales, inherited properties, and second homes.

The 60-day report is submitted through HMRC's online CGT on UK property service, separate from the self-assessment system. Failure to report within 60 days triggers late filing penalties under the same points-based regime used for other HMRC obligations. The disposal must still be included on your self-assessment return for the relevant tax year, with credit given for any payment on account already made.

Bed-and-Breakfasting: What the 30-Day Rule Does (and Doesn't) Mean for Landlords

Thinking of selling a property to crystallise a loss, or using your CGT annual exemption and then rebuying it? It does not work, and here is exactly why. Bed-and-breakfasting in UK tax is a share-side concept under TCGA 1992 s.106A: a 30-day matching rule that cancels the loss-claim effect of selling and rebuying the same class of securities. The rule applies to securities only, not to land or buildings. For direct property the operative traps are elsewhere: TCGA 1992 s.17 (disposals between connected persons deemed at market value regardless of actual consideration) and TCGA 1992 s.18 (losses on connected-persons disposals ring-fenced to future gains on disposals to the same connected person). Add the reduced annual exempt amount (£3,000 from 6 April 2024 per FA 2024) and the Part 8ZB trading-line trap on repeated transactions, and most bed-and-breakfasting-adjacent strategies for property landlords no longer work.

•9 min read

HMRC's Nudge Letters Demand Urgent Review of Gift Hold-Over Relief Claim: A Landlord Response Guide

HMRC's One-Too-Many nudge-letter campaigns repeatedly target prior hold-over relief claims under TCGA 1992 section 165 (gifts of business assets) and section 260 (gifts on which inheritance tax is chargeable). Landlord claims fail at three points: buy-to-let gifts where section 165 was claimed despite the trade-versus-investment line under the settled HMRC view and Pawson by analogy; gifts into discretionary trusts where the settlor-interested trust exclusion at sections 169B and 169C disapplies section 260 relief; and mixed-estate gifts where the agricultural bifurcation under Schedule 7 Part 1 was not properly applied. Here is how to respond inside the 60-day window: the statutory framework that decides whether your prior claim survives, the Digital Disclosure Service route if it does not, the Schedule 24 FA 2007 penalty exposure that follows, and the 30-day appeal window if HMRC issues an amended assessment.

•10 min read

HMRC's Nudge Letters on Business Asset Disposal Relief: A Landlord and Former-FHL Response Guide

HMRC's One-Too-Many nudge-letter campaigns have repeatedly targeted prior Business Asset Disposal Relief claims under TCGA 1992 sections 169H to 169SA (formerly Entrepreneurs' Relief, renamed by Finance Act 2020 section 23). Three landlord-cohort fail-points cluster here: former Furnished Holiday Let operators who disposed in 2024/25 or 2025/26 without checking the Finance Act 2025 Schedule 5 Part 4 transitional protection; LtdCo property-portfolio directors who claimed BADR on share disposal despite the company being investment not trading; and share disposals where the section 169S(3) tri-conditional 5% economic-interest test failed during the 2-year qualifying period. This page sets out the BADR architecture, the rate trajectory (10% pre-6-April-2025, 14% from 6 April 2025, 18% from 6 April 2026), the £1 million lifetime cap (NOT the historic £10 million), the 2-year qualifying period under section 169I(3), the FHL transitional protection mechanic, the 60-day operational response sequence, the Schedule 24 penalty exposure, and the 30-day appeal window under TMA 1970 section 31A.

•12 min read

CGT Deferral for UK Property Investors: 2026/27 Mechanics Guide

CGT deferral on a property disposal pushes the tax point into the future without erasing the gain. The four routes that work for property investors in 2026/27 are: EIS deferral relief under Schedule 5B TCGA 1992 (the only route that works on any chargeable gain, including standard BTL), incorporation relief under section 162 (the typical portfolio-landlord route), s.165 / s.260 holdover for narrow gift cases, and the s.152 rollover route (closed to standard BTL investment). This guide sets out the mechanics, the trade-offs and the case where each route is the right answer.

•16 min read

Claiming a Capital Loss on a UK Property Sale: 2026/27 Landlord Guide

A capital loss on a UK rental property is claimable for four years after the end of the tax year of disposal (TMA 1970 s.43). Once claimed, the loss offsets capital gains in the same year first (before the £3,000 annual exempt amount) and any unused balance carries forward indefinitely. This guide walks the section 16 TCGA 1992 computation, the joint-ownership split, the section 58 spouse trap, and the negligible value claim route for worthless property assets.

•16 min read

Lettings Relief in 2026/27: Post-2020 Rules, £40k Cap, Shared Occupation

Lettings Relief under section 223B TCGA 1992 (inserted by Finance Act 2020) is a narrow CGT relief for live-in landlords who shared occupation with their tenants. The pre-2020 framework (which gave up to £40,000 of relief on the let portion of a former main residence even without shared occupation) was repealed. The £40,000 cap remains, but the gateway is now shared occupation. The cut-off is the date of DISPOSAL, not the date of letting: a disposal on or after 6 April 2020 attracts the post-2020 rules across the entire letting period. This guide sets out the post-2020 framework, the lower-of-three computation under s.223B(4), the spouse interaction, the Rent-a-Room scheme distinction, and the corrected transitional-rule position per HMRC CG64710.

•13 min read

Principal Private Residence Relief for Landlords: 2026/27 UK Guide

Principal Private Residence Relief (PRR) under sections 222 to 226 TCGA 1992 exempts the slice of your gain that falls in the period a property was your only or main residence, plus the final 9 months of ownership. If you lived in a place, moved out and let it before selling (the 'accidental landlord' pattern), this is the relief that decides most of your CGT bill. Lettings Relief, restricted from 6 April 2020 to shared-occupation lettings only under section 223B (inserted by FA 2020), now helps in far fewer cases than landlords expect. The mechanics that matter are the section 222 framework, the 9-month rule and deemed-occupation extensions, the half-hectare permitted area, the post-2020 Lettings Relief reframe, the one-residence-per-couple rule, and the separating-spouse extension widened by Finance (No. 2) Act 2023.

•15 min read

How to Reduce CGT on a UK Property Disposal: 2026/27 Landlord Guide

Ten distinct levers reduce CGT on a UK property disposal: the £3,000 annual exempt amount, the spouse-AEA stack, Private Residence Relief, capital loss offset, base-cost capitalisation, tax-year straddling, the spouse-rate-band split, post-2020 Lettings Relief in shared-occupation cases only, BADR (closed for FHL post-5 April 2025), and incorporation relief as a deferral lever. This guide routes each lever to its specialist depth page and sets out the decision table for which lever fits which fact pattern.

•12 min read

Rollover Relief for Property: When UK Landlords Can (and Cannot) Claim

Section 152 TCGA 1992 business asset rollover relief defers CGT when a trader reinvests disposal proceeds into a qualifying replacement asset. The qualifying-asset gateway in section 155 Class 1 Head A requires the asset to be 'occupied (as well as used) only for the purposes of the trade'. Standard residential letting is settled as investment activity, not a trade, under the Salisbury House Estates v Fry [1930] line of authority, which closes rollover to most BTL landlords. The narrow groups that do qualify are commercial owner-occupiers, property developers with evidenced trading status, and (pre-6-April-2025 only) FHL businesses. This guide sets out the framework, the case-law spine, the two worked examples (qualifying vs failed), and the alternative reliefs for landlords who do not qualify.

•14 min read

Private Residence Relief and Joint Ownership: The Spousal Election and the One-Residence Rule

When you sell a jointly owned main residence, each of you claims Private Residence Relief on your own share of the gain separately. The relief is fact-by-fact at owner level, but two cross-rules in TCGA 1992 s.222 reshape the picture for couples: the s.222(5) nomination election that lets a couple owning two residences choose which one qualifies as the main residence (with a 2-year window from acquisition of the second), and the s.222(6) one-residence-per-couple rule that limits a married or civil-partner couple to one main residence between them while they live together. Covers the joint-ownership PRR computation, the election mechanics, why unmarried co-owners can each have their own main residence, how Form 17 does (and does not) interact with PRR, and the inter-spouse no-gain-no-loss route for restructuring base cost before disposal.

•11 min read

How the 2027 Property Income Tax Change Affects CGT and Disposal Timing

The confirmed April 2027 change for property landlords is the new separate income tax rates (22% basic, 42% higher, 47% additional) on rental profits. CGT rates on property remain at 18%/24% with no confirmed change. The 2027 income tax change still reshapes the disposal calculus: ongoing rental income becomes more expensive after tax, which shifts the sell-vs-hold and personal-vs-company decisions even though the CGT rate is static.

•8 min read

Capital Gains Tax on UK Property: Complete Guide for Landlords (2026/27)

The CGT regime for UK residential property disposals in 2026/27: 18% basic rate, 24% higher rate, £3,000 annual exempt amount, 60-day reporting requirement for UK residents where tax is due. Non-residents file for any UK land disposal. This pillar guide sets out the framework and links to the daughter pages on specific topics (calculation walkthrough, payment deadlines, PRR mechanics, disposal-timing planning).

•8 min read

CGT on Gifting Property to Family Members in the UK (2026 Guide)

Gifting UK residential property to a family member is treated as a disposal at market value for capital gains tax, even though no money changes hands. This guide covers the mechanics, the four main reliefs (spouse exemption, Principal Private Residence relief, s165 holdover relief on business assets, s260 holdover on gifts to relevant property trusts), the IHT seven-year rule, and worked examples covering parent-to-child gifts, spousal transfers, partial gifts, and gifts of let property.

•10 min read

What's Changing for Property CGT from 2027 and What Should Landlords Do?

The UK CGT regime for residential property currently sits at 18% basic rate and 24% higher rate, with a £3,000 annual exempt amount and 60-day reporting via HMRC's online service. The confirmed change from 6 April 2027 is the new property income tax rates (22/42/47%), which affects landlords indirectly through disposal timing and the incorporation decision. This guide separates what's confirmed from what's speculated and sets out the planning levers that matter regardless of which scenario plays out.

•6 min read

Commercial vs Residential Property CGT 2026/27: Same Rate, Different Reliefs and Mechanics

From 30 October 2024 (Autumn Budget 2024), the headline CGT rate for individuals is 18 per cent and 24 per cent for both commercial and residential property under TCGA 1992 s.1H. The historic 10/20 per cent commercial differential is gone. The real differentiators now are the availability of Business Asset Disposal Relief on genuinely-trading commercial, the rollover relief trading-asset requirement, the capital-allowances clawback under TCGA s.41, the SIPP/SSAS commercial-property pension exemption, and the company-CT framework under CTA 2009 s.2(2A). This page reframes the comparison around those mechanics.

•16 min read

CGT on Property Transfers in Divorce: Post-2023 Statutory Window Guide

Finance (No. 2) Act 2023 rewrote the CGT position on divorce. Inter-spouse transfers stay no-gain no-loss for the tax year of separation under TCGA 1992 s.58(1), then for a further three tax years under s.58(1A) to (1C), and indefinitely under s.58(1D) where the disposal is made under a court order or formal separation agreement. The departing spouse can preserve Private Residence Relief on the former family home under s.225B. This page is the BTL-portfolio-aware divorce CGT guide, with two worked examples including a four-property staged split.

•15 min read

CGT on Inherited Rental Property: Death-Uplift Calculation Guide 2026/27

When a rental property passes through an estate, TCGA 1992 s.62 deems the personal representatives to acquire it at open-market value at the date of death. That probate value becomes the CGT base cost for everyone downstream. The two structural choices then dominate the bill: whether the personal representatives sell during administration at 24 per cent or assent to a beneficiary who may sell at 18 per cent, and how the £3,000 annual exempt amount is sequenced across the three tax years it is available.

•15 min read

CGT Main Residence Election for Single Owners with Two Properties: s.222(5)(a) Mechanics

Under TCGA 1992 s.222(5)(a) a single owner with two or more residences can nominate which one is treated as the main residence for Private Residence Relief. The nomination must be made within two years of first acquiring the second residence, and can be varied later for any period up to two years before the variation. This page covers the single-owner mechanic in detail, including the qualifying-residence test, the variation flag technique, the integrated deemed-occupation framework, and the post-April-2020 Lettings Relief restriction.

•17 min read

UK CGT Rates on Property 2026/27: 18% / 24% Explained + Worked Examples

Capital Gains Tax on UK residential property for 2026/27 is charged at 18% on gains within the basic rate band and 24% on gains above it, under TCGA 1992 s.1H as substituted by Finance Act 2024. The same 18% / 24% rate structure applies uniformly to non-residential gains for individuals since 30 October 2024. Trustees and personal representatives pay 24% throughout. The annual exempt amount is £3,000 for 2026/27 (£1,500 for most trusts). This page walks through the rate structure with five worked planning examples, sets out where BADR and PRR change the position, and locates the rates within the wider 60-day reporting and Self Assessment framework.

•14 min read

CGT on Property Transfers Between Spouses: s.58 Gateway + SDLT Trap

Transfers of property between spouses or civil partners living together are no-gain no-loss disposals under TCGA 1992 s.58. The receiving spouse takes the original base cost, with CGT crystallising only on the eventual sale to a third party. What trips people up is not s.58 itself but the interactions around it: Form 17, the declaration of trust, the joint-tenancy bar, and the SDLT debt-assumption trap on mortgaged transfers. Divorce-specific transfers are covered separately.

•15 min read
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