Updated October 2026: allowance and deadlines revised for the 2026/27 tax year.
- Calculate your gain: Firstly, you need to work out your gain or loss by deducting the cost of the property (including any buying and selling expenses, such as estate agent fees and legal fees, and the cost of improvements) from the sale price. The resulting amount is your gain or loss.
- Determine if you need to pay CGT: If you’re a UK resident and your total gains exceed the tax-free allowance (the annual exempt amount), you will need to pay CGT. For the 2026/27 tax year, the allowance is £3,000. Gains on residential property are taxed at 18% within your basic rate band and 24% above it.
- Report your gain: If you do need to pay CGT, you must report your gain to HMRC using a Capital Gains Tax on UK property account. You can do this online. You will need to provide information about the property, such as the sale price and purchase price, as well as any allowable expenses.
- Pay your CGT: For residential property sold with a completion date on or after 27 October 2021, you must report and pay any CGT due within 60 days of completion. You can do this online.
- Keep records: It’s important to keep accurate records of all the costs associated with buying, selling, and improving the property, as well as any CGT payments made. This will help you calculate your gain accurately and make it easier to report to HMRC if required.
Private Residence Relief
You do not pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:
- you have one home and you’ve lived in it as your main home for all the time you’ve owned it
- you have not let part of it out – this does not include having a lodger
- you have not used a part of your home exclusively for business purposes (using a room as a temporary or occasional office does not count as exclusive business use)
- the grounds, including all buildings, are less than 5,000 square metres (just over an acre) in total
- you did not buy it just to make a gain
If all these apply you will automatically get Private Residence Relief and will have no tax to pay. If any of them do not apply, you may have some tax to pay.
Find out if you are eligible for Private Residence Relief, read our guide to selling residential property, or contact us for help with your CGT return.