Selling a rental property can trigger Capital Gains Tax (CGT). Landlords must plan ahead to avoid unexpected bills.
When CGT Applies
You pay CGT when you sell a property that is not your main home and its value has increased.
Allowances
- Annual CGT allowance (currently £3,000 for individuals, subject to government updates)
- Reliefs may apply if you lived in the property before renting it (Private Residence Relief and Lettings Relief).
Rates
- Basic-rate taxpayers: 18% on gains within their band
- Higher/additional-rate taxpayers: 28%
Reporting and Payment
CGT on UK property must be reported and paid within 60 days of completion.
Planning Ahead
- Keep records of purchase price, fees, and improvement costs
- Consider timing sales to minimise tax impact
- Seek professional advice if selling multiple properties
Conclusion
Capital Gains Tax is manageable with proper planning.Download our free landlord checklist for a full reminder of tax obligations and deadlines.