Capital gains tax on a rental sale

How the gain is built

The gain is the sale price less what you paid, less the incidental costs of buying and selling, and less any capital improvements. Legal fees, survey fees, the stamp duty you paid on the way in and the agent's commission on the way out are all allowable. Improvements are allowable; repairs are not, because repairs belong against your rental profit instead. An extension or a first-time central heating installation is capital. Replacing a broken boiler with an equivalent one is a repair, and it should already have been claimed in the year you paid for it.

What is left loses the annual exempt amount of £3,000 — unchanged for 2024/25, 2025/26 and 2026/27 — and the remainder is taxed at 18% to the extent it falls within your remaining basic rate band and 24% above it. That is why your other income appears in the calculator: your income fills the band first and the gain sits on top of it. A landlord with £45,000 of income has only a slice of the band left, so most of the gain is taxed at 24%.

Two rate changes are worth knowing, so you can spot an out-of-date figure. On 6 April 2024 the higher rate on residential property fell from 28% to 24%. On 30 October 2024 the main rates on all other assets rose from 10% and 20% to 18% and 24%, aligning everything — so residential property no longer carries any rate penalty, and a calculator still showing 28% is two years behind.

Private Residence Relief and the nine-month final period

If the property was ever your only or main residence, part of the gain is relieved. The relief covers the months you lived in it plus the final 9 months of ownership, whether or not you were living there at the end, and it applies automatically wherever the dwelling was your only or main residence at some point during ownership. The final period exemption is 9 months for disposals on or after 6 April 2020 under s.223 TCGA 1992; it was 18 months from 6 April 2014 and 36 months before that, so older guidance overstates it.

The calculator applies the relief as a straight time apportionment, which is how it works for a property that was your home and was then let. If you never lived in the property, enter zero and no relief is applied — that is the ordinary buy-to-let position. Full relief on the whole gain needs the property to have been your only home, lived in throughout the period of ownership, with no part let and no part used exclusively for business, and grounds including buildings under 5,000 square metres.

The 60-day deadline is the one that catches people

For completions on or after 27 October 2021 you must report the disposal and pay the tax within 60 days of completion, on a separate UK property disposal return. Not on your next Self Assessment return, and not by the following 31 January. It was 30 days for completions from 6 April 2020, so the window has widened, but it is still short. Put your completion date into the calculator and it gives you the actual date to work back from.

The practical consequence is that the money and the paperwork have to be ready before completion, not after. The base cost, the improvement receipts, the original purchase documents and any period of residence all need to be established first, which is difficult to do in eight weeks on a property bought two decades ago. The gain then also goes on your Self Assessment return, with the payment already made set against the final liability.

If you are not UK resident

Non-residents must report every disposal of UK property or land within 60 days — even where there is no tax to pay, and even where the disposal made a loss. Non-resident capital gains tax was extended to all UK property and land on 6 April 2019, and interest and penalties apply for late reporting. This catches people who have moved abroad and assume that leaving the UK ended the obligation. The non-resident landlords page covers it alongside the Non-Resident Landlord Scheme that runs while the property is still let.

What is not in the calculation

It assumes a single whole disposal of one UK residential property owned outright by one individual, with no other gains or losses in the year. Joint ownership halves most of the figures and gives each owner their own annual exempt amount. Transfers between spouses and civil partners are made on a no gain, no loss basis, which is why the ownership position is sometimes worth reviewing well before a sale rather than during one. Brought-forward losses, a property that was let while it was also your home, and gains already reported earlier in the same tax year all change the answer.

Nothing here is advice, and nothing here is a recommendation to sell or to keep anything. If you are weighing a sale against moving the portfolio into a company, the incorporation calculator shows why the same rules make that transfer expensive — a transfer to your own company is a disposal at market value too. The capital gains tax page sets out the rules in full, the tax calendar carries the 60-day window alongside every other date, and a free review is the fastest way to get the base cost and the reliefs established before the clock starts rather than after.