Capital Gains Tax Guide 2025: Help for UK Tax Payers
Cut through CGT jargon: learn when tax applies, how to work it out and file your return on time.
Cut through CGT jargon: learn when tax applies, how to work it out and file your return on time.
Sell a UK property for more than it cost and you may owe Capital Gains Tax (CGT). Work out the gain, claim any reliefs and file the 60-day HMRC CGT return to avoid penalties.
CGT sounds scary, yet it’s simply a tax on the profit (“gain”) you make when you sell or gift certain assets. The rules cover far more than bricks and mortar, so let’s start with the full picture.
In the UK, you might pay CGT on property, CGT on shares, CGT on cryptocurrency and even CGT on business sale. HMRC treats each asset class slightly differently, but the basic steps are the same: work out the sales proceeds, subtract what you originally paid (plus buying and selling costs), then deduct any reliefs or annual allowance. The rate you pay depends on whether you’re a basic- or higher-rate Income Tax payer.
Example: You bought a buy-to-let in 2012 for £200 000 and sold it in 2025 for £350 000. After £5 000 estate-agent fees and £1 000 legal costs, the gain is £144 000. Knock off the £3 000 allowance and you’re taxed on £141 000.
Before you reach for the calculator, gather proof of:
Now follow this four-step formula:
Private Residence Relief (PRR) wipes out the gain for the time you lived in the property as your main home, plus the final nine months of ownership. Lettings Relief can slice up to £40 000 off the gain if you let out part of your previous main home. Use HMRC’s free online calculator, but sanity-check the numbers — its default settings rarely match real life.
Mini-case study: Carla sold her former flat after three years of renting it out. She occupied it for five of the nine years she owned it. PRR exempted 5/9 of the gain; Lettings Relief knocked off another £20 000, slashing her tax by £4 800.
Since 2020, UK residents must file an online “HMRC CGT on UK Property” return within 60 days of completion. Miss the deadline and late-filing penalties start at £100, plus daily fines and interest.
You will need:
Once HMRC issues a payment reference, pay online or via Faster Payments. You must still list the gain on your Self-Assessment return the following 31 January so HMRC can reconcile anything under- or over-paid.
Short on time? The SwiftCGT: Online fixed-fee service lets chartered accountants handle the calculation and 60-day filing for you — £299 for a sole owner, £449 for joint owners. Returns are submitted within three working days, so you stay penalty-free.
The 60-day rule only applies to UK residential property. For other assets, note the key differences:
Tip: Use “bed and ISA” or “bed and spouse” strategies before 5 April to use each partner’s allowance and reset the base cost on shares or funds.
[Related: How to report crypto gains step-by-step](/crypto-cgt-guide)
External resource: The Office of Tax Simplification’s 2022 report (OTS) predicts further threshold cuts, so plan early.
You can avoid most CGT headaches with three golden rules: record-keeping, timing and expert help.
Useful tools:
Sell a UK property or other asset and you may face CGT. Calculate the gain: sale price minus purchase cost, selling fees and improvements. Claim Private Residence or Business Asset Disposal Relief where allowed, then subtract the annual exemption. UK property gains must be reported and paid within 60 days; everything else goes on Self-Assessment. Keep receipts, plan the timing and use a service like SwiftCGT for stress-free compliance.