How to Calculate Capital Gains Tax on UK Property: A 2025 Guide

CGT Property Rules, Rates and Quick Maths Explained

You pay Capital Gains Tax (CGT) on the profit – not the sale price – of a UK property that isn’t fully covered by private residence relief. Subtract what you paid, plus buying and selling costs, from the sale proceeds, apply any reliefs, then use today’s 18% or 24% rates to work out the bill.

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1. Map Your Taxable Gain in Four Easy Steps

You can’t cut a tax bill you don’t fully understand, so let’s start by turning complex CGT rules into a clear checklist.

Most time-poor homeowners trip up because they skip one of these steps:

1. Work out your sale proceeds. Use the actual completion price on your contract (not the estate-agent valuation).
2. Deduct your “base cost”. That’s the amount you originally paid for the property plus Stamp Duty Land Tax and legal fees.
3. Subtract allowable costs. Estate-agent fees, legal fees on the sale and capital improvements (for example, a loft conversion). Repairs and decoration don’t count.
4. Apply reliefs and the annual CGT allowance. In 2025/26 the allowance is £3,000 (down from £6,000 in 2024/25). Private Residence Relief (PRR) may also cover part of the gain if the home was ever your main residence.

Example: Zoe bought a buy-to-let flat for £210,000 in 2012, spent £5,000 on SDLT and legal fees and £20,000 on a new kitchen (capital improvement). She sells in June 2025 for £320,000 and pays £5,000 to agents and solicitors.

• Sale proceeds: £320,000
• Total costs: £210,000 + £5,000 + £5,000 + £20,000 = £240,000
• Gain before allowance: £80,000
• Gain after allowance (£3,000): £77,000

That £77,000 is what her CGT rate applies to.

2. Which CGT Rate Applies to 2025 Property Sales?

HMRC sets two residential-property rates (2025/26):

• 18% on gains that sit within your unused basic-rate income tax band
• 24% on the rest (reduced from 28% in April 2024)

To decide how much of your gain is taxed at 18% or 24%, you must stack it on top of your other income.

Using Zoe again: her salary is £45,000, leaving £7,270 of basic-rate band unused (£50,270 limit in 2025/26). So:

• £7,270 of gain × 18% = £1,308.60
• £69,730 of gain × 24% = £16,735.20

Total CGT: £18,043.80

Quick checks before you press “pay”:

• Did you live in the property at any point? You may claim PRR for those months plus the final 9 months.
• Was it let as residential accommodation? Letting Relief of up to £40,000 might apply if you lived there with tenants.
• Is your spouse a lower-rate taxpayer? You can transfer a share of the property before sale to use their allowance and rates.

HMRC CGT rate table (checked March 2025).

3. Maximise Deductions: Costs, Improvements and Reliefs

Time spent here equals money saved. Allowable costs often shave 5-10% off a gain, yet HMRC’s own data shows over 30% of returns omit at least one valid deduction (Freedom of Information release, 2024).

What you can claim:

• Initial purchase fees: survey, land registry, buyer’s legal fees.
• Capital improvements: extensions, new bathrooms, energy-saving upgrades.
• Sale costs: estate-agent commission, EPC, seller’s legal fees.
• Advertising costs if you sold privately.

What you can’t claim:

• Normal repairs like painting or fixing a boiler.
• Mortgage interest (that’s income-tax territory).
• Furniture or white goods.

Handy worksheet:

1. Open a spreadsheet or use HMRC’s “real time” CGT calculator.
2. Add every receipt into three columns: purchase, improvement, sale.
3. Scan and store PDFs in a labelled folder – HMRC can ask for evidence up to 5 years 10 months after the filing deadline.

Mini-case study: Sam sold a house for £500,000 making a raw gain of £150,000. His £38,000 of proven improvements cut the taxable gain to £112,000, trimming his tax by £9,120 at 24%.

Feeling overwhelmed? SwiftCGT’s online, fixed-fee service (£299 sole owner, £449 joint) has chartered accountants who review your receipts and file the return within three working days.

4. Don’t Miss the 60-Day CGT Property Deadline

Since 2020 you must file a UK Property CGT return and pay the tax within 60 days of completion. Penalties start at £100 for one day late and can top £1,600 plus interest if you forget for a year.

Filing routes:

• HMRC property account. Set one up with Government Gateway ID, enter figures, pay by debit card or Faster Payments.
• Agent filing. Authorise an accountant using the digital “link” code.

Information you’ll need:

• Completion date (on the TR1 form in England/Wales or disposition in Scotland).
• Sale price.
• All deductible costs and proofs.
• Estimate of your income for the whole tax year.

Remember: you’ll also declare the gain on your Self Assessment the following January, but any tax already paid is deducted.

[Related: Private Residence Relief explained](/private-residence-relief-guide)

5. Tools, Calculators and Professional Help in 2025

DIY is fine for straightforward cases. If your sale includes joint ownership, non-resident periods or multiple reliefs, the risk of an error – and a penalty – climbs fast.

Quick aids you can try today:

• HMRC’s Beta CGT calculator. Good for single-rate scenarios.
• Excel template. Build a reusable sheet with locked formulas.
• Specialist software. Some online portals auto-fetch HMRC rates.

Need a human to sanity-check your numbers? SwiftCGT pairs tech with HMRC-registered accountants who prepare and submit your 60-day return for a single, transparent fee. Joint sellers get 50% off the second return and a signed calculation sheet you can re-use for Self Assessment.

You can do this – but you don’t have to do it alone.

Key Takeaways

• Taxable gain = Sale proceeds – purchase price – purchase/sale costs – improvements – allowance.
• Apply 18% or 24% CGT rates based on your income band for 2025/26.
• File and pay within 60 days or face mounting penalties.

TL;DR Summary

Work out your gain, knock off every allowable cost and the £3,000 annual exemption, then split what’s left between 18% and 24% rates based on your spare basic-rate band. File and pay within 60 days. Online tools can help, or a fixed-fee service such as SwiftCGT will do the maths and filing for you.