If you’re planning to sell a rental property, you might be in for a Capital Gains Tax (CGT) bill - and it’s important to understand how much you’ll need to pay and when.

Many landlords get caught out because they don’t realise CGT returns must be submitted within 60 days of the sale, and the tax must be paid within the same timeframe.

How Is Capital Gains Tax Calculated?

When selling a property that wasn’t always your main residence, you’ll be taxed on the profit (gain) from the sale. This is calculated as follows:

Sale Price – (Purchase Price + Deductible Costs + Capital Improvements) = Taxable Gain

• Deductible Costs include solicitor and estate agent fees.
• Capital Improvements (e.g. an extension or major renovation) can reduce your taxable gain.

Can You Reduce Your Capital Gains Tax Bill?

Some reliefs and allowances may help lower your tax bill:

• Private Residence Relief – If you lived in the property at any point, you may qualify for partial relief.
• Annual CGT Allowance – You may be able to use the tax-free CGT allowance for the year to offset some of your gain.

The 60-Day Rule: Don’t Get Caught Out!

Once you sell your rental property:

• You must file a Capital Gains Tax return within 60 days
• You must pay any tax owed within 60 days

Miss the deadline, and HMRC will issue penalties - something no landlord wants!

How Carthy Accountants Can Help

At Carthy Accountants, we help landlords calculate, report, and pay CGT on time, so there are no nasty surprises.

Watch Lucy explain more below

Selling a rental property? Let’s make sure it’s done tax-efficiently. Get in touch today.

Get the Business You Want

Selling a rental property comes with tax responsibilities, but you don’t have to navigate them alone. At Carthy Accountants, we’ll help you calculate your Capital Gains Tax, claim any available reliefs, and ensure you meet the 60-day HMRC deadline, so you avoid unnecessary penalties.

Whether you’re planning a sale now or in the future, having the right financial strategy in place can save you time, money, and stress. Let’s make sure you get the business (and financial freedom) you want.

Get in touch today and let’s talk about your property tax strategy!