CGT on selling a second property: the 60-day reporting rule

Selling a property that is not your main home usually triggers capital gains tax, and unlike most UK taxes it is not something you settle comfortably after the tax year ends. You have 60 days from completion to report the disposal and pay what is owed.

This catches people constantly. The gain may be substantial, the deadline is short, and the obligation sits entirely separately from the Self Assessment system most people are familiar with.

At a glance

When does the 60-day rule apply?

You must report and pay within 60 days of completion if all of the following are true:

• You disposed of a UK residential property — sold it, gifted it, or transferred it.
• It was not your main home for the whole period you owned it, so Private Residence Relief does not cover the entire gain.
• There is capital gains tax actually payable after reliefs and the annual exempt amount.

That final condition is important and frequently overlooked in both directions. If the gain is fully covered by the annual exempt amount or by reliefs, there is no requirement to file a 60-day return. But if even a pound of tax is due, the obligation applies in full.

Properties commonly caught include buy-to-let investments, second homes and holiday homes, inherited property sold above its probate value, a former main home let out for part of the ownership period, and property transferred to someone other than a spouse or civil partner.

Selling your only or main home is normally covered entirely by Private Residence Relief and needs no report at all.

How the gain is calculated

The taxable gain is the disposal proceeds less the acquisition cost, less allowable costs, less any reliefs, less the annual exempt amount.

Allowable costs are more generous than people assume. They include stamp duty land tax paid on purchase, legal and survey fees on both purchase and sale, estate agent fees, and the cost of capital improvements — an extension, a new kitchen where none existed, a loft conversion. What they do not include is anything in the nature of repairs or maintenance: redecorating, replacing a boiler like for like, or fixing a roof are revenue costs, not capital.

The annual exempt amount for 2026/27 is £3,000. That is a fraction of what it was a few years ago, which is precisely why far more property sales now produce a reportable gain than used to.

Worked example

Marcus bought a buy-to-let for £180,000 and sells it for £280,000. He paid £6,300 stamp duty and £1,500 in legal fees on purchase, £4,000 in agent and legal fees on sale, and spent £12,000 adding a bathroom.

Marcus earns £45,000, so his basic-rate band is largely used. A small slice of the gain falls at 18% and the remainder at 24%, producing a bill in the region of £17,000 — due within 60 days.

What rate applies?

Residential property gains are taxed at 18% where the gain falls within your remaining basic-rate band, and 24% above it.

The crucial mechanic is that the gain stacks on top of your income. You add your taxable income and your gain together, and whatever part of the gain sits above the basic-rate threshold is taxed at the higher rate. Someone on a modest salary with a large gain will still pay 24% on most of it.

The Capital Gains Tax Calculator works this out against your own income, and our guide to capital gains tax rates covers how the bands interact in more detail.

How to report and pay

1. Create a Capital Gains Tax on UK Property account with HMRC. This is separate from your Self Assessment account, and setting it up takes time you may not have in a 60-day window.
2. Calculate the gain, including all allowable costs and any reliefs.
3. File the return through that account within 60 days of completion.
4. Pay within the same 60 days. Filing without paying does not stop interest accruing.
5. Report it again on your Self Assessment return if you complete one. The 60-day return is a payment on account of the year's liability, not a substitute for the annual return.

If you are appointing an agent to file on your behalf, start early — the authorisation process for the property account is separate from ordinary agent authorisation and routinely takes longer than people expect.

Inherited property: the figure that matters is probate value

Inherited property is the single most misunderstood case, because people assume they are taxed on the whole increase in value since the deceased bought it. They are not.

You acquire the property at its market value at the date of death — the probate value. Your gain is measured only from that point. A house bought for £40,000 in 1985, valued at £310,000 on death and sold for £325,000 produces a gain of around £15,000 before costs, not £285,000.

This makes the probate valuation genuinely important, and it is worth getting a proper one rather than an estate agent's optimistic guess. An undervaluation at probate may reduce inheritance tax slightly but increases the capital gain later, and HMRC can challenge a figure that looks convenient. Where the estate paid inheritance tax, the value used for IHT is normally the value you inherit at, so the two have to be consistent.

If the property is sold shortly after death and the sale price is close to probate value, there may be no meaningful gain and therefore no 60-day return. Our guide to inheritance tax when the second parent dies covers the estate side.

Non-residents selling UK property

If you are not UK resident and you dispose of UK property, the 60-day obligation still applies — and it applies more broadly. Non-residents must report the disposal within 60 days whether or not there is any tax to pay, which is a materially stricter rule than the one facing UK residents.

That catches British expats selling a former home, and it catches them precisely because they reasonably assume no tax means no filing. It does not, and the penalties for non-filing apply just the same.

Penalties for missing the deadline

Late filing attracts an initial fixed penalty, with further penalties as the delay lengthens and additional charges once the return is six and then twelve months late. Interest runs on unpaid tax from day 61 regardless.

The penalties escalate quickly enough that a return filed a few months late on a substantial gain can add up to a meaningful sum on top of the tax itself. If you have already missed the deadline, file as soon as possible rather than waiting — the penalty regime rewards getting it in.

Reliefs that can reduce or remove the bill

• Private Residence Relief. If the property was your main home for part of the ownership period, that proportion of the gain is relieved, plus a final period of ownership which is treated as if you lived there even if you did not.
• Lettings relief. Now much narrower than it once was, and generally only available where you shared occupation with the tenant.
• Transfers between spouses. Transfers to a spouse or civil partner are made on a no gain, no loss basis. Moving a share before sale can bring a second annual exempt amount and a second basic-rate band into play, which on a large gain is often the single most effective planning step available.
• Capital losses. Losses on other assets in the same year, or brought forward from earlier years, are set against the gain.

Practical steps before you sell

Almost all effective planning has to happen before completion, which is why this is worth reading in advance rather than afterwards.

Gather your paperwork early: the original purchase completion statement, invoices for improvements, and both sets of legal and agent fees. Improvement receipts from a decade ago are the item people most often cannot find, and without evidence the deduction is hard to sustain.

Consider whether a transfer of part-ownership to a spouse makes sense, and whether timing the completion either side of 5 April changes which tax year the gain falls into — two tax years means two annual exempt amounts if you can split the disposal. And check whether you have unused capital losses sitting in earlier returns, because they are only usable if they were reported.

A note on how to use this

This guide explains the rules as they stand for the 2026/27 tax year and is written to help you understand your own position. It is general information, not personal financial advice — your circumstances change the answer, sometimes completely. For a decision that matters, speak to a regulated adviser or check directly with HMRC. Our calculation methodology sets out where every figure on this site comes from.

Where these figures come from

Every rate and threshold on this page is checked against HMRC's published guidance for the 2026/27 tax year. If you spot a figure that looks out of date, please tell us.

• GOV.UK guidance for this topic