When do you pay Capital Gains Tax?
Capital Gains Tax (CGT) is payable when you make a profit on the sale of an asset, most commonly:
- A buy-to-let property
- A second home
- Land or investment assets
You may also need to pay CGT on your main residence if it has not been your home for the entire period of ownership.
When is CGT due on property?
For UK residential property, CGT must be:
- Reported and paid within 60 days of completion (this has increased from the previous 30-day deadline)
This applies to disposals that result in a CGT liability.
How do you report the gain?
You must report the sale using a UK Property Account.
This is:
- Separate from your Personal Tax Account
- Separate from your Self Assessment tax return
Once submitted, HMRC will issue a payment reference, which must be used when paying the tax.
What if you don’t have all the figures?
You can submit a reasonable estimate of the gain if:
- Final figures are not yet available
This helps you:
- Meet the 60-day deadline
- Avoid late filing penalties
The figures can then be corrected later if needed.
Do you still need to include it on your tax return?
Yes — in most cases.
If you complete a Self Assessment tax return, you must:
- Report the gain again in your annual return
If you do not normally file a tax return, the 60-day report may be sufficient.
What happens if you miss the deadline?
HMRC penalties apply if you fail to report on time:
- £100 initial penalty for late submission
- Additional penalties if delays exceed 6 and 12 months
- Interest charged on late paid tax
How much tax do you pay?
Capital Gains Tax rates on residential property are:
- 18% for basic rate taxpayers
- 24% for higher and additional rate taxpayers
You may also benefit from the annual exempt amount (£3,000 for 2025/26).
What records should you keep?
To calculate CGT accurately, you should keep records of:
- Purchase price
- Legal and stamp duty costs
- Improvement and extension costs
- Sale costs (e.g. estate agents, legal fees)
Keeping this information ready ensures you can meet the 60-day deadline.
Common mistakes to avoid
- Missing the 60-day reporting deadline
- Assuming your main residence is always fully exempt
- Not keeping records of improvement costs
- Forgetting to report the gain again in Self Assessment
- Underestimating the tax due
Final thoughts
Capital Gains Tax on property is time-sensitive and must be dealt with quickly after completion.
With only 60 days to report and pay, preparation is key — especially if you want to minimise tax and avoid penalties.
Action point:
If you are planning to sell a property, ensure you have all records ready and understand your CGT position before completion.
