We know learning about CGT isn’t the most exciting use of your time. That’s why we learn the ins and outs: so you don’t have to.
But, if you want to know more about CGT, here’s a more detailed overview:
As of 6 April 2020, HMRC requires individuals to report and pay any CGT due within 60 days of completing the sale of a UK residential property.
While "disposing of an asset" can include gifting, transferring, or selling various types of assets, our service focuses specifically on helping you meet your CGT File & Pay obligations when selling a property.
If you haven’t sold a property and want to understand other scenarios that may trigger a CGT liability, you can learn more on the official government website:
👉https://www.gov.uk/capital-gains-tax
One of the factors used in calculating CGT is your income. Currently, there are 5 rates that CGT is charged at depending on income and what asset is being disposed of. Since we are focusing on calculating CGT for you if you’ve sold a property, the 18 and 28% are the most relevant rates:
It is also important to note that these rates only apply to the taxable gain, NOT the total income. The Annual Exempt Amount allows a certain portion of your gain to be taken free of tax. For this 2025/26 tax year, the Annual Exemption is £3,000.
If you do not inform HMRC when changes happen that affect your liability to tax, there is likely to be a penalty. For example, selling an property that’s made a capital gain and not filing & paying it could result in a penalty of upto 100% of the tax due.
With only 60 days from the point of sale to file & pay your CGT, you can never be too careful that all your documents and calculations are accurate to avoid penalties. There are currently 3 types: latesection penalties, inaccuracy penalties and failure to notify penalties.
If a return is filed MORE THAN 60 DAYS from the point of sale, there is a late penalty of £100. If a return is filed MORE THAN 6 MONTHS from the point of sale, there is a late penalty of £300 OR 5% of the outstanding tax, whichever is higher. If a return is filed MORE THAN 12 MONTHS from the point of sale, there is also a late penalty of £300 or 5% of the outstanding tax, whichever is higher.
If a penalty arises DUE TO LACK OF REASONABLE CARE, the penalty will be between 0 and 30% of the extra tax due. If the ERROR IS DELIBERATE, the penalty will be between 20 and 70% of the extra tax due. If the ERROR IS DELIBERATE AND CONCEALED, the penalty will be between 30 and 100% of the extra tax due.
If you do not inform HMRC when changes happen that affect your liability to tax, there could be a penalty. For example, selling an asset that’s made a capital gain and not filing & paying it could result in a penalty. This penalty is calculated based on the amount of tax that’s been unpaid as a result of the failure to notify.