Many homeowners and their advisors may not be aware that they are liable for Capital Gains Tax (CGT) on the sale of a property because of the continuously changing legislation governing capital gains tax and real estate transactions.

Normally, no CGT is charged when a house is sold, but in some circumstances, you can still owe tax on the profits you acquired.

When a basic rate taxpayer has taxable profits that exceed their tax-free allowance but are still within the tax-free allowance’s threshold, the issue becomes more problematic. Their total taxable income and taxable profits will be taxed at a rate of 28% for any sum that exceeds the higher rate threshold of £50,271.

Who is impacted by this?

You will be affected if you own a property that is not your primary home, including the following types of properties:

  • Second or holiday homes
  • Let properties

You may also be affected by the selling of your main house if:

  • You’ve let it out in the past
  • You’ve used it for business
  • It’s an especially large property

Keep in mind that you only have to pay capital gains tax (CGT) on profits that exceed your annual limit (which is now £12,300 per individual). Shared ownership with your spouse will double your allowance when selling the home in the future.

CGT on the sale of a home in the UK must be reported and paid within 60 days of the sale’s completion.

How to report CGT

You may be required to open a Capital Gains Tax on UK Property account when reporting the sale of a UK residential property to HMRC.

This will allow you to:

  • Report the disposal of UK residential property or land
  • Pay any tax owed for that disposal
  • View previous and current returns

There are a few exclusions from filing a return, but the deadline offers only a limited amount of time to acquire supporting evidence, calculate CGT, or get valuations if necessary.

To avoid fines, you must disclose the appropriate information and any tax paid to HMRC within this new time window.

Get in touch with us at for help and support surrounding Capital Gains Tax.