Home / Glossary / Capital Gains Tax (CGT)
What is Capital Gains Tax (CGT)?
Capital Gains Tax (CGT) is the tax on the profit when you sell or give away an asset such as a rental property. The gain is the sale price less what you paid and allowable costs like legal fees and improvements.
Why it matters to landlords
For residential property the rates are 18% for gains within the basic rate band and 24% above it, after an annual exempt amount of £3,000. Selling a UK residential property with tax to pay means reporting and paying within 60 days of completion.
Capital improvements you made and kept records of reduce the gain, which is another reason to keep invoices for years.
Capital Gains Tax calculator →