Scope: Capital Gains Tax applies UK-wide, including Scotland — CGT is not devolved, unlike income tax rates. Figures are for the 2026/27 tax year, verified against HMRC on 8 August 2026.
The rates
For residential property:
- 18% on gains falling within your basic rate income tax band
- 24% on gains above it
The gain stacks on top of your income. A basic-rate taxpayer with a large gain will pay 18% on the part that fits in the remaining basic-rate band and 24% on the rest — not 18% on all of it.
The annual exempt amount is £3,000 for 2026/27. It has fallen sharply in recent years and is now small enough that most rental disposals are taxable.
60 days, and this is the one people miss
You must report and pay within 60 days of completion for UK residential property, where completion was on or after 27 October 2021. It applies to UK residents and non-residents alike. Before that it was 30 days; before April 2020 it went on the annual return.
Two things landlords get wrong:
- It is 60 days from COMPLETION, not from the end of the tax year and not from exchange.
- You report even if there is no tax to pay. HMRC is explicit: report all disposals of UK property or land by the deadline. Interest and penalties follow from missing it.
Reporting is through a Capital Gains Tax on UK property account. It is separate from Self Assessment, and the disposal still goes on the annual return afterwards.
Working out the gain
Proceeds, less:
- what you paid
- purchase costs — legal fees, survey, and the SDLT or LTT you paid on the way in
- capital improvements — the extension, the new bathroom that was an upgrade. This is where the revenue-versus-capital line pays you back: everything correctly treated as capital reduces the gain here
- selling costs — agent, legal
- the £3,000 annual exempt amount
Repairs claimed against rental income do not come off again. One or the other.
Private residence relief, if you ever lived there
Periods it was your only or main residence are relieved, and the final 9 months of ownership always qualify regardless of use in that time. That extends to 36 months for a disabled person or someone moving into a care home.
Lettings relief is not what it was
This trips up landlords working from older advice. Lettings relief now applies only where you shared occupancy — part of the dwelling let while another part remained your main residence. HMRC: it “does not apply where the whole of the dwelling house was let for a time”.
The classic case — lived there, moved out, let the whole place — no longer qualifies at all. Where it does apply it is the lowest of: the private residence relief already calculated, £40,000, or the gain attributable to the letting.
Losses
Capital losses set against capital gains, not rental income. See losses for which pot is which — mixing them up is common.
Sixty days is not long. The purchase costs and improvement invoices you need are the ones filed years ago. Keep documents with the property.
Information tool, not tax advice. Rates and allowances change; check the position for your disposal date and take advice.