Capital Gains Tax (Property)
Capital Gains Tax on property disposal is decoupled from main self-assessment by the 60-day reporting requirement (since April 2020 for UK-resident landlords, since 2015 for non-residents). When a UK BTL or other non-primary-residence property is sold, CGT must be reported and paid within 60 days of completion. Specialist Harrow accountants prepare the CGT computation correctly, claim available reliefs (principal private residence, lettings relief where qualifying, annual exemption), and meet the deadline. Generalists frequently miss the 60-day window entirely.
What Capital Gains Tax (Property) Actually Involves
CGT on residential property disposal is at residential rates: 28% for higher-rate landlords on the gain above the annual exemption (currently £3,000), 18% for basic-rate landlords. The gain is calculated as: sale price minus base cost (purchase price + SDLT + legal fees on purchase) minus capital expenditure across the hold period minus costs of disposal (legal fees, agent fees, EPC if separately paid for the sale). Specialist accountants build the CGT computation from the property records over the hold period; generalists frequently rely on whatever the conveyancing solicitor documented at sale, missing capital expenditure or disposal costs.
The 60-day reporting deadline is post-2020 — UK-resident landlords disposing of UK residential property must report and pay the CGT within 60 days of completion via the dedicated UK Property Account online service. The same gain is also reported on the SA return for the relevant tax year, with the 60-day payment offset against the eventual SA liability. Late filing triggers £100 fixed penalty plus daily penalties from day 90 plus interest. Specialist accountants handle the 60-day filing as soon as completion happens.
Principal Private Residence (PPR) relief exempts the gain on a property that has been your only or main residence throughout the period of ownership. Partial PPR applies where the property was your main residence for part of the period (the proportion of ownership during which the property was your main residence, plus the final 9 months of ownership regardless). Lettings relief (now restricted post-April 2020 to periods where the owner was in shared occupation with a tenant) provides further relief in narrow cases. Specialist accountants identify PPR opportunities; generalists frequently miss the partial PPR claim where a property was once a main residence and later became a BTL.
Non-Resident CGT (NRCGT) applies to non-resident landlords disposing of UK property — same rates as UK-resident CGT (28% residential / 18% / 24% for non-residential since 2024), but with a separate online filing system and the same 60-day deadline. Non-resident landlords also need to file the NRCGT return within 60 days; specialist accountants handle the NRCGT preparation alongside the income-tax-side NRL Scheme work. Generalist accountants frequently miss the NRCGT 60-day deadline because the regime is non-resident-specific.
The annual CGT exemption is £3,000 (reduced from £6,000 in 2023/24, from £12,300 in earlier years). For a landlord with multiple disposals in a year, the exemption applies once across all disposals. Specialist accountants time disposals to maximise exemption use across years where possible. The exemption cannot be carried forward.
Where CGT (Property) Catches Landlords Out
Final-period PPR relief — for any property that has been your main residence at any point, the final 9 months of ownership are treated as main-residence period regardless of actual occupancy. Specialist accountants apply this; generalists frequently calculate PPR on actual residence dates only, missing the final-9-months tail.
Lettings relief restriction — pre-April 2020, lettings relief gave up to £40,000 of relief on properties that had been let after being a main residence. Post-April 2020, the relief is restricted to periods where the owner was in shared occupation with a tenant (rare). Specialist accountants apply the post-2020 rules correctly; generalists frequently still apply the pre-2020 rules.
Joint ownership — each owner has their own annual exemption and their own marginal CGT rate. A married couple disposing of a jointly-owned BTL doubles the available annual exemption (currently 2 × £3,000 = £6,000). Specialist accountants apply per-owner exemptions; generalists frequently apply a single exemption to the joint disposal.
Probate value as base cost — when a beneficiary inherits property, the base cost for future CGT is the probate value at death (the date of acquisition for CGT purposes is the date of death). Higher probate value = higher IHT but lower future CGT. Lower probate value = lower IHT but higher future CGT. Specialist accountants model both; generalists frequently default to the lowest defensible probate value without considering the future CGT effect.
Spouse exemption transfers — transfers between UK-domiciled spouses are no-gain-no-loss for CGT (the receiving spouse takes over the original base cost). Useful for restructuring before disposal so both spouses' annual exemptions are used. Specialist accountants advise on this pre-disposal; generalists frequently process the disposal in single ownership without considering spouse-side restructuring.
Negligible value claims — where a property has fallen in value materially (rare but possible in localised market conditions or due to environmental issues), a negligible value claim can crystallise the loss for set-off against other capital gains. Specialist accountants identify the opportunity; generalists rarely consider it.
How CGT (Property) Plays Out
60-day reporting for higher-rate landlord, BTL disposal
Higher-rate-tax landlord sold a Harrow BTL for £580k in October 2025 (purchased 2014 for £290k, plus £8.7k SDLT, £4k legal fees on purchase). Capital expenditure across the hold: £21k (kitchen, bathroom, double glazing, full rewire). Costs of disposal £15k (legal + agent + EPC). Gain calculation: £580k - £290k - £8.7k - £4k - £21k - £15k = £241.3k. Annual exemption £3k applied. Taxable gain £238.3k at 28% residential rate = £66,724 CGT. Filed 60-day return at day 38 with full computation; tax paid in time. Same gain reported on the SA return for 2025/26; 60-day payment offset against eventual SA liability. Net effect: clean compliance, no penalties.
Partial PPR claim, BTL was former primary residence
Landlord sold a Pinner BTL that had been their main residence for the first 6 of 14 years of ownership (2011-2017 main residence, 2017-2025 BTL). Generalist accountant had calculated CGT on the full gain. Correct computation: ownership 14 years total. Main residence period = 6 years actually + 9 months final-period uplift = 6.75 years. PPR proportion = 6.75 / 14 = 48.2% of the gain exempt. Total gain £312k; PPR-exempt portion £150.4k; taxable gain £161.6k - £3k annual exemption = £158.6k at 28% = £44,408 CGT. Generalist had calculated CGT on £312k = £86,500 — overpaid by ~£42k that we recovered via amended return.
Spouse exemption transfer pre-disposal
Married couple holding BTL solely in higher-rate-tax spouse's name. Planning to dispose for £420k (gain £180k). Solo disposal: £180k - £3k exemption = £177k at 28% = £49,560 CGT. Pre-disposal restructure: half-share transfer to basic-rate-tax spouse (no-gain-no-loss spouse exemption), then joint disposal. Each spouse's share: £90k - £3k exemption = £87k. Higher-rate spouse: 28% × £87k = £24,360. Basic-rate spouse: 18% × £87k = £15,660. Combined CGT £40,020. Saving vs solo disposal: £9,540. Restructure cost: £400 legal. Net saving: £9,140.
Capital gains tax across the Harrow catchment
CGT on property disposal is the standard year-end work across all the Harrow areas. Each area has its own market dynamics:
Capital gains tax in Harrow
Capital gains tax in Pinner
Capital gains tax in Ruislip
Capital gains tax in Edgware
FAQs on capital gains tax
When do I have to report capital gains on a property sale?
How is CGT calculated on a UK residential property sale?
What is Principal Private Residence relief?
Can I deduct improvements I made to the property over the years?
Does the annual CGT exemption double if I co-own with my spouse?
I'm a non-resident landlord — does CGT apply when I sell my UK property?
What records do I need for a property CGT calculation?
What if I sold a property at a loss?
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