Do Limited Companies Pay Capital Gains Tax on Property?

No. Limited companies do not pay capital gains tax. Capital gains tax is charged on individuals, trustees and personal representatives; a company that sells a property at a profit makes a chargeable gain and pays corporation tax on it. For 2026/27 that means 19% where your company's augmented profits are £50,000 or less, 25% where they reach £250,000, and marginal relief in between. If someone has quoted your company an 18% or a 24% rate on a property sale, they have given you the personal CGT rates by mistake.

The distinction is not a technicality. It changes your rate, whether you get an annual allowance, whether indexation helps, when the tax falls due and which return it goes on. This page covers all of it, including commercial property and land, and what you pay personally if you sell shares in the company instead. If the property is still owned personally and you are thinking about moving it into a company, that is a different transaction with its own CGT charge on you, covered at CGT on transferring property to a limited company.

Do companies pay CGT, or corporation tax on capital gains?

Corporation tax on capital gains. There is no separate capital gains tax for companies and no corporate capital gains tax rate. When your company disposes of a chargeable asset, the gain is computed under capital gains principles and then dropped into the corporation tax computation alongside rental profits, interest and everything else. One rate applies to the total.

So the answer to "do companies pay capital gains tax" is no, while the answer to "does my company pay tax on the gain" is obviously yes. The gain is taxed as part of corporation tax rather than as a standalone charge with its own rate card.

That single mechanism has consequences directors routinely get caught by:

• Your company's property gain is not ring-fenced. It sits on top of your rental profits, so a gain can lift the whole company into a higher corporation tax band for that year.
• Your company has no annual exempt amount. The £3,000 that shelters an individual's first slice of gain does not exist at company level.
• Your company does not file a 60-day CGT return. The gain waits for the corporation tax return, which changes your cash flow considerably.

What rate does your company pay on a property gain in 2026/27?

Whatever corporation tax rate applies to the company for that accounting period. The framework has applied since 1 April 2023 and turns on a lower limit, an upper limit and the relief between them.

Augmented profits for the period	2026/27 position	Effect on a property gain
£50,000 or less	Small profits rate 19%	Gain taxed at 19% if the total stays inside the lower limit
£50,001 to £249,999	Main rate less marginal relief	The slice between the limits carries an effective rate of 26.5%
£250,000 or more	Main rate 25%	Whole of the taxable profits at 25%, no marginal relief
Close investment-holding company	Main rate 25% at all levels	Small profits rate unavailable regardless of size

Marginal relief is not a rate you apply. It is a deduction from the main-rate charge, computed as (U − A) × (N ÷ A) × 3/200, where U is the upper limit, A is augmented profits and N is taxable total profits. The 26.5% figure is the effective rate emerging on the slice between the limits, a result rather than an input.

The table hides two traps, both common in property structures.

Associated companies divide the limits. Where your company has associated companies, both the £50,000 lower limit and the £250,000 upper limit are divided by the number of associated companies plus one. Five SPVs under common control means a £10,000 lower limit and a £50,000 upper limit each, so a single property sale takes the selling SPV straight to the main rate. Work out your divided limits before you assume 19%.

Close investment-holding company status removes the small profits rate entirely. A company investing in land is not a close investment-holding company where the land is, or is intended to be, let commercially. But "let commercially" carries a wide exclusion: the letting is not commercial if the tenant is connected with the company, the spouse or civil partner of a connected person, a relative of a connected person, or that relative's spouse or civil partner. A buy-to-let SPV with unconnected tenants gets the small profits rate. An SPV housing your son or your brother-in-law probably does not, and pays 25% at every profit level.

How do you calculate a company's chargeable gain?

You build it the same way an individual builds a CGT computation, then add one step they do not get. Start with your sale proceeds and work down:

• Deduct the incidental costs of disposal: agent's commission, sale legals, marketing directly attributable to the disposal.
• Deduct the acquisition cost and incidental costs of acquiring, including the Stamp Duty Land Tax (SDLT) your company paid on purchase, survey and purchase legals.
• Deduct enhancement expenditure still reflected in the property at the date of sale, such as an extension or a loft conversion. You cannot deduct repairs and redecoration already relieved against rental profits, and you cannot claim the same cost twice.
• Deduct indexation allowance on any element of the base cost incurred up to December 2017, which is where the allowance stops.

What is left is the chargeable gain. It joins the company's other profits for the period, and corporation tax is charged on the total.

Here is what that looks like in practice. Suppose your SPV bought a freehold shop in June 2019 for £260,000, with £9,000 of SDLT and legal costs on acquisition. It sells in the accounting period ending 31 March 2027 for £430,000, with £11,000 of agent and legal costs. There are no associated companies and the tenant is unconnected.

Step	Amount
Sale proceeds	£430,000
Less costs of disposal	(£11,000)
Less acquisition cost and acquisition costs	(£269,000)
Indexation allowance (acquired after Dec 2017)	£0
Chargeable gain	£150,000
Plus rental profits for the period	£22,000
Taxable total profits	£172,000
Corporation tax at the main rate	£43,000
Less marginal relief: (£250,000 − £172,000) × 3/200	(£1,170)
Corporation tax payable	£41,830

Note what the gain did to the rent. On its own, £22,000 of rental profit would have been taxed at 19%; the gain dragged the whole £172,000 into the marginal relief band. That is the ring-fencing point in numbers, and a reason to think about which accounting period you complete in.

Does your company get the annual exempt amount or the 18% and 24% rates?

No to both. The annual exempt amount of £3,000 belongs to individuals (£1,500 for most trusts). The 18% and 24% rates that have applied to individuals' property gains since 30 October 2024 belong to individuals too. Neither reaches your company.

This is a genuine cost of corporate ownership at the disposal stage. A married couple owning a property jointly in their own names shelter £6,000 of gain between them every year before any tax is due; their company shelters nothing. On the worked example above, an individual with a £150,000 gain and higher-rate income would deduct £3,000 and pay 24% on £147,000, which is £35,280, against the company's £41,830 (though that also covers tax on £22,000 of rent). The sale is where the company usually looks worse and the ownership years are where it looks better, the trade covered at corporation tax versus income tax for landlords.

Does indexation allowance still reduce your company's gain?

Yes, if any of your base cost was incurred up to December 2017. Indexation allowance is frozen at December 2017, so it runs from the month your company incurred the expenditure to December 2017 and then stops. Everything after that is unrelieved inflation, and spend from January 2018 onwards attracts nil indexation rather than a partial amount.

So check the computation two ways. If your company bought in 2007 and is selling now, indexation covers a decade of inflation, so check the computation claims it against both the purchase price and any pre-2018 improvement spend. If your company bought in 2019 or later, indexation is worth nothing and you should not let anyone build it into a projection.

Individuals get no indexation at all, one of the few areas where the corporate position is straightforwardly better. On a long-held property it offsets a real chunk of a gain an individual owner would be taxed on in full.

How does your company report and pay tax on the gain?

Through the corporation tax return, on the corporation tax clock. There is no 60-day return, because your company is not within capital gains tax, and the 60-day UK property return is a CGT obligation.

The payment date and the filing date are not the same day, and the earlier one is the one people miss:

• Corporation tax is payable 9 months and 1 day after the end of the accounting period. For a 31 March 2027 year end, that is 1 January 2028.
• The CT600 return is due 12 months after the period end. For the same year end, that is 31 March 2028.
• Companies with profits over £1.5 million pay by quarterly instalments instead, which brings tax on a large gain forward significantly. That £1.5 million is divided by the number of associated companies, the same as the small profits limits, so a five-SPV portfolio hits instalments at £300,000 per company.

That gap is why corporate disposals feel easier on cash flow. An individual with tax to pay has 60 days from completion; if your company's sale lands early in its accounting period, the payment date can be well over a year away. Do not treat that as free money. Set the tax aside at completion. The filing cycle is covered at corporation tax for property companies.

Is capital gains tax on commercial property different when a company owns it?

The tax charged is different, yes: corporation tax rather than CGT. But the type of property is not what drives that difference; the identity of the owner is.

Since 30 October 2024, an individual's commercial and residential gains have been taxed at the same 18% and 24% rates, so the old rate gap has gone for personal owners. If you own the commercial property personally, the rate matches a rental house. For a company, the rate is the corporation tax rate whichever type of property it is: commercial property held in a company has no separate gains rate, no separate allowance and no separate return. What decides the tax on a commercial property gain is who owns it, not what it is.

What commercial property genuinely changes on the company side is the capital allowances interaction. Plant and machinery within the building, and structures and buildings allowances claimed on the fabric, both have consequences at sale, so get that position agreed before the contract is drafted rather than after. The individual side of the comparison is set out at how CGT on commercial property differs from residential.

What about CGT on land sales held in a company?

Land follows the same rule as buildings, with one important fork. If your company holds land as an investment, a sale produces a chargeable gain and corporation tax applies. That covers bare land, paddocks, garden land sold off separately and land carrying planning permission the company held and sold.

The fork is trading. Where a company acquires land intending to develop and sell it on, HMRC will generally treat the profit as a trading profit, not a chargeable gain. The tax still lands in corporation tax, so the rate looks the same, but indexation is not available on trading stock, the computation follows trading rules, and the transactions-in-land provisions can pull an apparently capital profit into the trading charge. If your company bought land, secured planning and sold, expect that question.

For individuals, capital gains tax on the sale of land sits at the same 18% and 24% rates as any other non-residential disposal since 30 October 2024, and land sold with planning consent is no different. Selling land as an individual carries the 60-day reporting obligation where tax is due; through your company it does not.

What happens when you sell the business rather than the property?

This is where the two taxes finally meet, and precision matters, because "selling the business" describes two completely different transactions, and the capital gains tax follows the seller.

Asset sale. Your company sells the property (and any other assets) and keeps the cash. Your company pays corporation tax on the chargeable gains. You then still have to get the money out, which is a second tax event for you personally. Two layers.

Share sale. You sell your shares and the buyer takes the company with the property inside it. Your company pays nothing, because it has disposed of nothing. You pay capital gains tax on the share disposal. One layer.

Buyers know this. A buyer taking shares inherits the company's history, its latent gain on the property (the base cost does not step up) and anything buried in its filing record, and they price that in by discounting for the corporation tax that would fall due on a future sale. Capital gains tax on selling a business therefore has no single rate, because it depends which of the two you are actually selling, and that is a choice made at the negotiating table: whether a share sale beats an asset sale turns on the discount you are offered, not just the rate you would pay.

Do you pay capital gains tax when you sell shares in your property company?

Yes. That disposal is yours, not your company's, and it is squarely within capital gains tax. You pay 18% or 24% depending on where the gain sits when stacked on your income for the year, after deducting your £3,000 annual exempt amount and any allowable capital losses.

Do not assume Business Asset Disposal Relief will bring that down. BADR requires shares in a trading company, and a company holding property as an investment is not trading for this purpose. Incorporating a buy-to-let portfolio and then selling the shares does not convert investment gains into BADR-qualifying gains. The qualification rules, and why property investment fails them, are set out at BADR and residential property qualification.

The 60-day UK property return does not apply to a share sale by a UK resident either, because you are disposing of shares rather than UK land; you report through self assessment. A non-UK resident selling shares in a property-rich company is the exception: the indirect disposal rules catch it and the 60-day clock applies.

What does it cost to get the money out of the company?

Corporation tax on the gain is not the end of the story if you want the cash personally. The proceeds sit in the company, and taking them out is a second charge.

A dividend is taxed on you at the dividend rates in force from 6 April 2026: 10.75% ordinary rate, 35.75% upper rate and 39.35% additional rate, after the £500 dividend allowance. On a large one-off gain, most of a dividend extraction lands at the upper or additional rate. Salary or bonus brings income tax and both classes of National Insurance. Leaving the cash in the company to buy the next property avoids the second charge entirely, which is why corporate ownership suits landlords reinvesting rather than drawing down. A members' voluntary liquidation at the end of the company's life is a capital route, so extraction is really a question about your exit plan. Take advice before the sale completes, because some options close once the disposal is done.

What if your company is not UK resident?

Flagged rather than covered in depth, because it is a specialist regime. A non-resident company disposing of UK land is within the non-resident chargeable gains rules at TCGA 1992 s.1A and typically pays corporation tax on the gain rather than CGT. The reporting obligation is stricter than the UK-resident position: a non-resident must report every UK land disposal within 60 days of completion, whether or not any tax is due, and that includes indirect disposals of shares in property-rich entities. There is no annual exempt amount for a non-resident company.

If you have been reading older material, correct this before you act on it. ATED-related CGT was abolished from 6 April 2019, so any page still quoting a 28% ATED-CGT charge on enveloped dwellings is describing a regime that no longer exists. If an offshore company holds your UK residential property, take specific advice, because the ATED annual charge, the non-resident gains rules and the Register of Overseas Entities run in parallel and none of them replaces the others.

How do you legitimately reduce a limited company's tax on a property gain?

There is no exotic answer to avoiding capital gains tax on a limited company's property, and anyone offering you one should be treated with suspicion. The levers that actually work on a corporate disposal, commercial property included, are these:

• Time the completion against your accounting period end. The gain is not ring-fenced, so the period it falls into affects the rate on your rental profits too, and it moves the payment date by up to a year.
• Use your capital losses. Company capital losses set against chargeable gains of the same period, with the balance carried forward. They cannot touch rental profits. If you hold one underwater property and one heavily appreciated, realising both in the same period is worth modelling.
• Claim the indexation you are entitled to on any pre-2018 base cost. It is genuinely missed by people used to personal CGT.
• Capture every deductible cost. Acquisition legals, SDLT on purchase, survey fees, capital improvement spend with invoices, disposal agent and legal fees. Costs with no paper trail get disallowed on enquiry.
• Check your associated companies before you sell, because divided limits change which band the gain lands in and any structural answer has to be in place well ahead of the disposal.
• Review the capital allowances position on commercial property before contracts are drafted.

What does not work: expecting an annual exempt amount, an 18% or 24% rate, BADR on an investment company, or a base-cost reset from moving the property between your own companies. Group transfers happen on a no-gain-no-loss basis, so the latent gain travels with the asset.

Company or personal ownership: which pays less on a sale?

Neither, universally. Here is the comparison in one place so you can see which side each factor falls on.

Factor	Individual	Limited company
Tax charged on the gain	Capital gains tax	Corporation tax on chargeable gains
Rate on a property gain, 2026/27	18% or 24%	19%, 25%, or marginal relief between
Annual exempt amount	£3,000	None
Indexation allowance	None	Yes, on base cost incurred up to December 2017
Gain interacts with other income or profits	Rate depends on income band	Gain is added to profits and can move the whole band
Reporting	60-day UK property return where tax is due	CT600, no 60-day return
Payment date	60 days from completion	9 months and 1 day after period end
Getting the proceeds personally	Already yours	Second charge on extraction
Business Asset Disposal Relief	Not on investment property	Not on shares in an investment company

Read that as a disposal-stage comparison only. Corporate ownership is argued for on the ownership years, where full interest deduction and retained-profit reinvestment do the work, not on the exit. A structure that saves you tax for fifteen years and costs you at the end can still be the right one. Our complete guide to capital gains tax on property covers the personal side in full.

The short version

Your limited company does not pay capital gains tax. It pays corporation tax on chargeable gains at 19%, 25% or the effective 26.5% marginal rate for 2026/27, with no annual exempt amount, no 18% or 24% rates, no 60-day return, and indexation only on base cost incurred up to December 2017. If you sell your shares instead of the property, that disposal is yours and it is CGT at 18% or 24%. Decide the accounting period, the losses, the indexation and the extraction route before you exchange, because after completion your options narrow to filing the return correctly.