If you sell a UK residential rental property and there is Capital Gains Tax to pay, you must report the sale and pay the tax within 60 days of completion. You do it through HMRC's online service for Capital Gains Tax on UK property. If you also complete a Self Assessment return, the sale goes on that return too, and the tax you paid earlier is credited.
The 60 days is a hard deadline. HMRC's guidance says you may have to pay interest and a penalty if you do not report and pay on time. The rest of this article explains who has to file, how the gain is worked out, what rate applies and what can reduce the bill. The figures are for the 2026/27 tax year. Check GOV.UK before you file, particularly after the Budget on 28 October 2026.
The 60-day deadline at a glance
| Situation | What to do | When |
|---|---|---|
| UK resident sells UK residential property and has CGT to pay | Report and pay using HMRC's Capital Gains Tax on UK property service | Within 60 days of completion |
| UK resident, no CGT to pay (gain within the allowance, or a loss) | No 60-day return is usually needed. Include the sale on Self Assessment if you complete one | Self Assessment deadline |
| Not UK resident, any UK property or land | Report every disposal, even with no tax due or a loss | Within 60 days of completion |
| Jointly owned property | Each owner reports their own gain or loss | Within 60 days of completion, for each owner |
The 60-day limit applies to completions on or after 27 October 2021. Before that the deadline was 30 days, so any older guidance that says 30 days is out of date.
What counts as completion, and why the date matters
The deadline runs from completion, the date you stop being the owner. In practice that is the day the buyer's money arrives and the keys are handed over, not the day you agree a price. Count 60 days from that date, and do not leave it to the last week. The return needs figures you may not have to hand.
Exchange of contracts matters for a different reason. For an unconditional contract, the date of exchange normally decides which tax year the disposal falls in. That in turn decides which annual allowance, which losses and which year's taxable income and rates apply. If you exchange in March and complete in April, the gain belongs to the tax year of exchange, but the 60-day clock starts at completion. Check the contract if the sale is conditional or unusually structured, because the dates may not fall where you expect.
Who needs to file a 60-day return
You file a 60-day return if you are a UK resident individual (or a trustee or personal representative) and you have Capital Gains Tax to pay on the sale of UK residential property. GOV.UK says that a UK resident does not need to report gains online if total gains are below the tax-free allowance.
Two further points catch people out.
- No tax due does not mean no paperwork if you are non-resident. A non-UK resident must report every sale or disposal of UK property or land by the deadline, even when there is no tax to pay or the sale made a loss.
- A UK resident with no tax to pay may still have Self Assessment to think about. If you already complete a return, the sale belongs on it even when the gain is covered by the allowance or by losses.
If you are reporting for someone else, you use your own Capital Gains Tax on UK property account and need proof that you are allowed to act, such as a lasting power of attorney. HMRC's guidance says personal representatives of an estate cannot pay through the account when they report a gain for an estate. HMRC tells them how to pay after they report. Agents have a separate route for reporting a client's gain.
How the gain is worked out
Capital Gains Tax is charged on the gain, not on the sale price. The calculation starts with the sale proceeds and takes off the purchase price and the allowable costs:
| Step | Amount |
|---|---|
| Sale price | £300,000 |
| Less original purchase price | (£180,000) |
| Less purchase costs (stamp duty, legal fees) | (£7,000) |
| Less qualifying capital improvements | (£20,000) |
| Less selling costs (agent, legal) | (£6,000) |
| Gain before allowance | £87,000 |
| Less annual exempt amount | (£3,000) |
| Taxable gain | £84,000 |
This is a simplified illustration. Reliefs, losses, ownership changes and earlier gifts can all alter the result.
Costs you can deduct
- Buying costs: Stamp Duty Land Tax, solicitor and survey fees paid when you bought.
- Selling costs: estate agent and solicitor fees on the sale.
- Improvements: spending that added value and is still reflected in the property when you sell, such as an extension, a loft conversion, an extra bathroom or a garage.
Costs you cannot deduct
- The mortgage. Repaying the mortgage does not reduce the gain. The mortgage affects how much cash you receive, not the tax. Mortgage interest and the costs of arranging a mortgage are not allowable against the gain either. Interest is dealt with against rental income, which we cover in mortgage interest relief for landlords.
- Repairs and maintenance. Repainting, replacing broken roof tiles, repairing an existing boiler, fixing leaks and general maintenance between tenancies are revenue costs. They belong against rental income.
- Anything you have already claimed against rent. A cost cannot be used twice.
The repairs-or-improvements trap
The line between a repair and an improvement depends on the facts. A high cost does not make something an improvement. Repairs, like-for-like replacements of part of the property and redecorating go against rental income in the year you pay for them. Improvements, alterations, replacing a whole asset and work that makes a run-down property usable when you bought it are capital costs. They cannot be deducted from rent, but they can be added to the cost of the property and reduce the gain, provided they are still reflected in the property when you sell.
A genuine repair that was allowable against rent cannot be moved into the Capital Gains Tax calculation, even if it was never claimed. If a repair was missed, the fix is to correct the earlier tax return within its time limits. The practical risk is that refurbishment invoices fall between the two calculations and nobody claims them. Keep the invoices that show what work was done, and give them to your accountant each year and again when you sell.
Capital Gains Tax rates and the annual exempt amount
The annual exempt amount is the tax-free allowance: £3,000 for an individual and £1,500 for trusts. You pay Capital Gains Tax only on your overall gains above it. It applies per person per tax year, not per property, and an unused allowance cannot be carried forward.
For gains from 6 April 2026:
- Higher and additional rate taxpayers pay 24%.
- Basic rate taxpayers pay 18% on the part of the gain that fits inside their unused basic rate band, and 24% on the rest.
The rate therefore depends on your other income as well as the size of the gain. GOV.UK sets out the method:
- Work out your taxable income: income minus your Personal Allowance and any other Income Tax reliefs.
- Work out your total taxable gains.
- Deduct the tax-free allowance from the gains.
- Add the result to your taxable income.
- The part that falls within the basic rate band (£37,700 for 2026/27) is taxed at 18%. Anything above it is taxed at 24%.
GOV.UK gives two examples for 2026/27, both with taxable income of £20,000:
| Example 1 | Example 2 | |
|---|---|---|
| Taxable gain | £12,600 | £52,600 |
| After £3,000 allowance | £9,600 | £49,600 |
| Added to income | £29,600 (under £37,700) | £69,600 (over £37,700) |
| Tax | 18% throughout = £1,728 | 18% on £17,700 and 24% on £31,900 = £10,842 |
Two consequences follow. A normally basic-rate taxpayer can pay 24% on much of a large gain. And because the rate depends on income in the tax year of the sale, the year in which the disposal falls can change the bill. If your income will be lower in a particular year, more of the gain may fall in the 18% band. Plan that before you exchange contracts, not after.
Reporting and paying through HMRC's online service
You use a Capital Gains Tax on UK property account to report and pay, and to view or change a return you have already made. You can create the sign-in details the first time you use it. HMRC's guidance lists what you need to have ready:
- the address and postcode of the property
- the date you got the property
- the date you exchanged contracts when selling
- the date you stopped being the owner (completion)
- the value when you got it and the value when you sold it
- the costs of buying, selling or improving the property
- details of any reliefs, allowances or exemptions you claim
The return also asks for an estimate of your taxable income for the year, which is why the rate can only be settled with a reasonable view of the rest of your income.
You can pay when you report or afterwards, by approving a payment through your online bank account, by online or telephone banking, by debit or credit card, or by cheque. If you cannot use the online service, you complete an online form, print it and post it to HMRC. HMRC then sends a 14-character payment reference starting with X, which you need in order to pay by the deadline. Keep a digital or printed copy of every return.
Then it goes on your Self Assessment return
The 60-day return is a payment on account. It is not the end of the reporting. If you are registered for Self Assessment, you include details of the sale on your tax return as well, and the tax already paid is taken into account.
Order matters here. HMRC's guidance says you cannot change a 60-day return online if you have already sent a Self Assessment return for the same tax year, or if the return is for 2023 to 2024 or earlier. Get the 60-day figures right first, rather than counting on tidying them up later.
Private residence relief: if the property was ever your home
If the rental property was at some point your only or main home, Private Residence Relief can exempt part of the gain. The gain is spread across the whole period of ownership. The part that relates to periods when the property was your main residence is relieved, and the rest stays taxable.
The qualifying periods include:
- periods when you genuinely lived there as your main residence
- certain permitted periods of absence, where you lived there both before and after
- the final 9 months of ownership, provided the property was your main residence at some point, even if it was let during that time
- a longer final period, 36 months, in some disability and care-home cases
The 9-month final period has applied since 6 April 2020. Before that it was longer, so older examples can overstate the relief.
A short stay or a correspondence address is not enough. HMRC may look at whether the occupation had the character and permanence of a genuine residence. As a simple illustration, if you lived in a property for five years and rented it for another five, the relief covers the five years of residence and the final nine months, with the balance taxable.
Letting relief: now much narrower
Letting relief used to be available to anyone who let out a former home. Before April 2020 it could be worth up to £40,000 per person. It now applies only where you lived in the property at the same time as your tenant, that is, shared occupation. It is not available where you let the whole property and lived elsewhere. Do not assume that living in a property before or after a tenancy produces the relief. Private Residence Relief and letting relief are separate calculations with separate conditions.
Capital losses
Allowable capital losses can reduce the gain. They can come from another property, from shares or from other chargeable assets. Losses of the current year are set against gains of the same year. Unused losses can be carried forward to later years, provided they were claimed. You must claim a loss within four years of the end of the tax year in which it arose. Review your loss history before you exchange contracts, when it can still change your decisions, rather than after the tax has been calculated.
Joint ownership, spouses and civil partners
Where a property is jointly owned, each owner reports their own gain or loss. Each has their own annual exempt amount, their own taxable income and basic rate band, their own available losses and their own 60-day deadline. The beneficial ownership matters, not just the name on the Land Registry title, particularly where there is a declaration of trust or an earlier ownership arrangement.
Here is the effect. Take a property sold for £280,000 after selling costs of £4,000, bought for £150,000 with £4,000 of buying costs and £20,000 spent on an extension. The gain is £102,000.
| Gain | Allowance | Tax | |
|---|---|---|---|
| Sole owner, higher rate taxpayer | £102,000 | £3,000 | £99,000 × 24% = £23,760 |
| Higher-rate spouse, 50% | £51,000 | £3,000 | £48,000 × 24% = £11,520 |
| Other spouse, 50%, with £20,000 taxable income | £51,000 | £3,000 | £17,700 × 18% = £3,186, plus £30,300 × 24% = £7,272, total £10,458 |
| Joint total | £21,978 |
The joint position is £1,782 lower, because two allowances and two basic rate bands are in use.
Transfers between spouses or civil partners who live together are treated as no gain, no loss. The receiving spouse takes over the transferring spouse's cost. A transfer before a sale can therefore spread a gain between two taxpayers, but only if it is real:
- it must happen before there is a binding sale contract
- legal and beneficial ownership must genuinely change, and the new owner should be entitled to their share of the proceeds
- a transfer made once the onward sale is already in hand is ineffective
- mortgage lender consent may be needed, and Stamp Duty can arise if responsibility for mortgage debt moves
- it also changes who receives future rental income
Take advice before signing any transfer documents.
Gifts and inherited properties
Giving a rental property away does not avoid the charge. A gift to anyone other than your spouse or civil partner is treated as a sale at market value, so tax can fall due when you receive no money, for example when you give a property to an adult child. This can leave a bill with no sale proceeds to pay it.
If you inherit a property, there is normally no immediate charge. On a later sale the starting cost is usually its value for Inheritance Tax (the probate value) or its market value at the date of death. Keep the probate valuation and any evidence behind it.
Records to gather before you exchange
Most of the work is in the paperwork. Before contracts are exchanged, collect:
- the original purchase completion statement
- invoices for legal fees, stamp taxes and other acquisition costs
- invoices for improvement work, kept separate from repairs
- proof of who legally and beneficially owns the property
- dates and evidence of any period when you lived there
- details of any capital losses you can use
- a realistic estimate of your taxable income for the year of disposal
- probate or date-of-death valuations for inherited property, and market valuations for gifted property
Then estimate the tax before you commit the net proceeds elsewhere. You will need the money within 60 days of completion.
Where Deplexify fits
The 60-day return is a short form, but the numbers behind it, the cost base, the repairs-or-improvements split, the relief and the rate, are where mistakes are made. Deplexify prepares accounts and tax for UK landlords, among other clients. If you are planning a sale, see our UK property page.
Frequently Asked Questions
Do I need a 60-day return if I made a loss or no tax is due?
If you are UK resident and have no Capital Gains Tax to pay, you usually do not need a 60-day return. Include the sale on your Self Assessment return if you complete one. If you are not UK resident, you must report every disposal of UK property or land within 60 days, even with no tax due or a loss.
Does my mortgage reduce the gain?
No. The gain is the sale price less the purchase price and allowable costs. Repaying the mortgage affects your cash, not the tax, and mortgage interest and arrangement fees are not deductible from the gain.
What rate of Capital Gains Tax will I pay on a rental property?
For gains from 6 April 2026 it is 18% on the part of the taxable gain that fits in your unused basic rate band, and 24% on the rest. Higher and additional rate taxpayers pay 24%. The rate depends on your taxable income in the tax year of the disposal.
Can I use the annual exempt amount more than once?
Only one is available to each individual each tax year, however many assets you sell. Joint owners each have their own, which is why ownership structure matters.
Can I claim letting relief on a house I rented out while living elsewhere?
No. Letting relief applies only where you lived in the property at the same time as your tenant. Private Residence Relief may still cover the periods you lived there and the final 9 months of ownership.
Sources
- Report and pay your Capital Gains Tax: If you sold a property in the UK - GOV.UK — gov.uk, read 2026-10-18
- Capital Gains Tax: what you pay it on, rates and allowances: Capital Gains Tax allowances - GOV.UK — gov.uk, read 2026-10-18
- Capital Gains Tax: what you pay it on, rates and allowances: Capital Gains Tax rates - GOV.UK — gov.uk, read 2026-10-18
- Tax when you sell property: What you pay it on - GOV.UK — gov.uk, read 2026-10-18
- Selling a Rental Property: Capital Gains Tax Planning Points — praccounting.co.uk, read 2026-10-18
- Capital Gains Tax - A Complete Guide — ukpropertyaccountants.co.uk, read 2026-10-18
- UK resident landlords | Capital Gains Tax - Landlords Tax Services — landlordstax.co.uk, read 2026-10-18
- Capital Gains Tax on Buy to Let: 2026/27 Guide | Optimise — optimiseaccountants.co.uk, read 2026-10-18
- About Capital Gains Tax On Investment Property In The UK — landlordstudio.com, read 2026-10-18
- Capital Gains Tax and Selling a Rental Property: Smart Tax Strategies for Landlords in England | TLA - The Landlord Association — landlordassociation.org.uk, read 2026-10-18