Calculate Your Capital Gains Tax
Your Capital Gains Tax Calculation
Capital Gain
Taxable Gain
CGT Due
Net Proceeds
Detailed Breakdown
How to Use This Capital Gains Tax Calculator
Follow these 6 simple steps to calculate your capital gains tax liability on UK property sales. Our calculator provides instant CGT estimates based on current HMRC rates and allowances for the 2025-26 tax year.
Enter Original Purchase Price
Input the original price you paid for the property when you purchased it. This is the base cost for calculating your capital gain. For example, if you bought a buy-to-let property for £200,000 in 2015, enter "200000". Include the actual purchase price shown on the contract, not including additional costs like stamp duty or legal fees (these are entered separately).
💡 Tip: If you inherited the property, use the probate value (market value at date of death) as your purchase price. For gifted properties, use the market value at the date of the gift. If you purchased before March 1982, special rules apply - consult HMRC guidance or a tax advisor.
Enter Sale Price
Input the price you sold (or are selling) the property for. This is the gross sale price before deducting any costs. For example, if you sold your second home for £350,000, enter "350000". Use the actual sale price from the contract, not the asking price. If you're planning a future sale, use a realistic market valuation from estate agents or online tools like Rightmove or Zoopla.
⚠️ Important: If you gift the property or sell it below market value to a connected person (family member, business partner), HMRC will calculate CGT based on the market value, not the actual sale price. This prevents tax avoidance through artificially low sale prices. Always use market value for gifts or non-arm's length transactions.
Enter Improvement Costs
Input the total cost of capital improvements made to the property during your ownership. Capital improvements are enhancements that add value, such as extensions, loft conversions, new kitchens, bathrooms, or conservatories. For example, if you spent £15,000 on a loft conversion and £8,000 on a new kitchen, enter "23000". Do NOT include routine repairs and maintenance (e.g., repainting, fixing leaks, replacing broken items).
💡 Capital vs. Repairs: Capital improvements: Extensions, loft conversions, new kitchens/bathrooms, central heating installation, double glazing (first time). Repairs (NOT allowable): Redecorating, fixing broken items, routine maintenance, replacing like-for-like (e.g., old boiler with new boiler). Keep all receipts and invoices as evidence.
Enter Purchase Costs
Input all costs incurred when you originally purchased the property. This includes stamp duty (SDLT), legal fees, survey costs, and valuation fees. For example, if you paid £5,000 stamp duty, £1,500 legal fees, and £500 survey, enter "7000". These costs reduce your capital gain and therefore your CGT liability. Keep all original purchase documentation.
✅ Allowable Purchase Costs: Stamp duty land tax (SDLT), solicitor/conveyancer fees, survey and valuation fees, land registry fees, search fees, mortgage arrangement fees (if paid upfront), estate agent fees (if you paid them as buyer). Total typical costs: £3,000-£10,000 depending on property value.
Enter Sale Costs
Input all costs incurred when selling the property. This includes estate agent fees (typically 1-3% of sale price), solicitor fees, Energy Performance Certificate (EPC), and any advertising costs. For a £350,000 sale, expect £3,500-£10,500 agent fees (1-3%), £1,000-£2,000 legal fees, £100 EPC. Total example: £5,000-£13,000. These costs are deductible from your capital gain.
💡 Allowable Sale Costs: Estate agent commission (1-3% of sale price), solicitor/conveyancer fees (£1,000-£2,000), EPC certificate (£60-£120), advertising costs (if not included in agent fees), valuation fees (if required). Keep all invoices. Typical total: 2-4% of sale price.
Enter Annual CGT Allowance & Select Tax Rate
Enter the annual CGT allowance for the tax year of sale. For 2025-26, this is £3,000 (reduced from £6,000 in 2023-24). Then select your tax rate: 18% for basic rate taxpayers or 28% for higher/additional rate taxpayers. Your tax rate depends on your total income including the capital gain. If your income plus the gain pushes you into the higher rate band (over £50,270), you'll pay 28% on the portion above the threshold.
⚠️ Tax Rate Selection: 18% rate: Total income (including gain) under £50,270. 28% rate: Total income (including gain) over £50,270. Mixed rate: If gain straddles the threshold, part is taxed at 18%, part at 28%. Example: £45,000 income + £20,000 gain = £5,270 at 18% (£949), £14,730 at 28% (£4,124). Use HMRC's tax calculator for complex situations.
Important Capital Gains Tax Reminders
- 60-Day Reporting: You must report property disposals and pay any CGT due within 60 days of completion using HMRC's online service. Late reporting incurs penalties (£100 minimum, increasing with delay).
- Principal Private Residence Relief: Your main home is usually exempt from CGT. However, if you've let it out, used it for business, or own more than 5,000 square metres, partial CGT may apply.
- Spouse Transfers: Transferring property to your spouse/civil partner before sale can utilize both annual allowances (£6,000 total) and potentially lower tax rates if one spouse is a basic rate taxpayer.
- Timing Strategies: Consider splitting sales across tax years to use multiple annual allowances. Selling in April-May 2026 vs. March 2026 could save £540-£840 (£3,000 allowance × 18-28%).
- Professional Advice: This calculator provides estimates only. For complex situations (multiple properties, mixed use, business asset disposal relief, incorporation relief), consult HMRC-registered tax advisors or accountants.
HMRC Compliance Notice
This calculator provides capital gains tax estimates for informational purposes only. It does not constitute tax, financial, or legal advice. Capital gains tax on UK property is governed by HMRC regulations and subject to complex rules including Principal Private Residence Relief, lettings relief, and business asset disposal relief. CGT rates (18% basic rate, 28% higher rate) and annual allowances (£3,000 for 2025-26) are subject to change in government budgets. Actual tax liability depends on individual circumstances including total income, other capital gains in the tax year, available reliefs, and property usage history. You must report property disposals within 60 days of completion via HMRC's UK Property Disposal Service and pay any CGT due. Penalties apply for late reporting (£100 minimum) and late payment (interest charges). For properties held in trusts, companies, or with complex ownership structures, specialist tax advice is essential. Always consult HMRC-registered tax advisors, chartered accountants, or tax solicitors before making property disposal decisions. MortgagePro.uk is a comparison tool and not a tax advisor, accountant, or HMRC representative.
Understanding Capital Gains Tax on Property
CGT Rates
- Basic rate taxpayers: 18% on property gains
- Higher/additional rate taxpayers: 28% on property
- Rates apply to residential property disposals
- Different rates for other assets (10%/20%)
- Rates subject to change in budget announcements
Allowances & Reliefs
- Annual exemption: £3,000 for 2025-26 (reduced from £6,000)
- Principal private residence relief available
- Letting relief for some circumstances
- Business asset disposal relief possible
- Indexation allowance for pre-1998 purchases
Allowable Costs
- Original purchase price and legal costs
- Stamp duty and survey fees
- Capital improvements and extensions
- Sale costs including agent and legal fees
- Advertising and marketing expenses
Payment & Deadlines
- Report disposal within 60 days of completion
- Pay capital gains tax within 60 days
- Include in annual self-assessment return
- Interest charged on late payments
- Penalties apply for late reporting
Frequently Asked Questions
Essential information about capital gains tax on UK property investments
What is the current capital gains tax rate on property in the UK?
For the 2025-26 tax year, capital gains tax on residential property is 18% for basic rate taxpayers and 28% for higher and additional rate taxpayers. These rates apply to the taxable gain after deducting the annual exemption (£3,000 for 2025-26, reduced from £6,000 in 2023-24) and allowable costs. Your tax rate depends on your total income including the capital gain. If your income plus the gain exceeds £50,270, you'll pay 28% on the portion above this threshold. For example, if you have £45,000 income and a £20,000 gain, you'll pay 18% on £5,270 and 28% on the remaining £14,730.
What costs can I deduct when calculating capital gains tax?
Allowable costs include the original purchase price, legal fees, stamp duty, survey costs, capital improvements (not repairs), sale costs including estate agent fees, legal fees for the sale, and advertising costs. Regular maintenance and repairs cannot be deducted.
Do I need to pay capital gains tax on my main residence?
Generally no, your main residence is exempt from capital gains tax under Principal Private Residence Relief. However, if you've let out part of the property, used it for business, or it's very large (over 5,000 square metres), some CGT may apply. Second homes and investment properties are subject to CGT.
When do I need to report and pay capital gains tax?
You must report the disposal and pay any CGT due within 60 days of completion (formerly 30 days). This is done through the UK property disposal service online. You must also include the disposal in your annual self-assessment tax return. Penalties apply for late reporting and payment.
Can I reduce my capital gains tax liability legally?
Yes, several strategies can help: utilize your annual CGT allowance, consider transferring assets to a spouse, time disposals across tax years, ensure all allowable costs are claimed, consider business asset disposal relief if applicable, and seek professional tax advice for complex situations involving multiple properties or business use.