When it applies
Capital Gains Tax is due on the profit you make selling a property, not the sale price itself. GOV.UK confirms that selling your main home is normally covered by Private Residence Relief, so no Capital Gains Tax is typically due. It usually applies instead to a second home, a buy-to-let property, or land, where the property has increased in value since you acquired it.
The 60-day deadline
GOV.UK states that you must report and pay any Capital Gains Tax on most sales of UK property within 60 days, using HMRC's dedicated online service, separately from your usual Self Assessment timetable. GOV.UK also confirms that interest and a penalty can apply if you do not report and pay on time, though it does not set out the exact penalty figure — check the current position with HMRC or with us before you complete a sale.
Your tax-free allowance
Everyone has an annual exempt amount of Capital Gains Tax-free gains each tax year, currently £3,000 for an individual. You only pay Capital Gains Tax on the total gains above that figure in the year.
Current rates
GOV.UK's current guidance gives a rate of 18% on gains that fall within your basic rate Income Tax band, and 24% on gains above it or for a higher-rate taxpayer. Which band you fall in depends on your other taxable income for the year, so the same gain can be taxed differently for two people.
Working out the gain
You need the price you paid, the price you sold for, and allowable costs such as buying and selling fees and, in some cases, the cost of improvements. Get this wrong and you risk over- or under-paying within a 60-day window that leaves little time to fix mistakes, so it is worth getting the figures checked before you report.
Need a hand with your return?
We prepare and file Self Assessment returns for directors, sole traders and landlords, and tell you exactly what is due and when before anything is submitted. Call 0114 327 1480.