Question 1

What is the 60-day rule for Capital Gains Tax?

Accepted Answer

If you sell a UK residential property and there is Capital Gains Tax to pay, HMRC must be told and the tax paid within 60 days of completion, using the “Capital Gains Tax on UK property” service. The 60 days run from completion, not exchange, and the return is separate from your Self Assessment.

Question 2

Do I pay Capital Gains Tax if I live in the property?

Accepted Answer

If the property has been your only or main home for the whole time you owned it, Private Residence Relief normally covers the entire gain, so there is nothing to pay and nothing to report. Relief is restricted if you let the property, used part of it exclusively for business, or lived elsewhere for a period.

Question 3

What are the Capital Gains Tax rates on property in 2026/27?

Accepted Answer

Residential property gains are taxed at 18% to the extent the gain falls in the basic rate band, and 24% above it. The annual exempt amount is £3,000, and it is set against the gain before tax is worked out.

Question 4

Which costs can I deduct from the gain?

Accepted Answer

Stamp Duty and legal and survey fees paid on purchase, estate agent and legal fees on sale, and the cost of capital improvements such as an extension or a new kitchen where none existed. Repairs, redecoration and mortgage interest are not deductible against the gain.

Question 5

How does the final period exemption work?

Accepted Answer

The last 9 months of ownership qualify for Private Residence Relief provided the property was your main home at some point, even if you had already moved out.

Question 6

Is lettings relief still available?

Accepted Answer

Lettings relief now applies only where you shared occupation of the home with your tenant. Where it applies it is capped at £40,000.

Stamp duty, rental income and capital gains calculations