2 mins read

A Comprehensive Guide to Capital Gains Tax in the UK: An Insight into CGT Rules and Private Residence Relief

Navigating the landscape of UK's Capital Gains Tax regulations

calculator and pen on table
Photo by Pixabay on Pexels.com

Key Takeaways:

  • Recent regulations by HMRC detail the obligations of landlords concerning Capital Gains Tax (CGT).
  • Reporting and payment timelines for CGT have undergone changes, with the current stipulation being 60 days post property sale completion.
  • A significant surge in CGT revenue has been observed, primarily from landlords.
  • Private Residence Relief (PRR) offers a potential avenue to minimize CGT, given specific conditions are met.

Introduction: Choosing the Right Capital Gains Tax Consultant

The intricacies of taxation, particularly when considering capital gains from property sales, are manifold. Correct payment, availing potential reliefs, and avoiding penalties necessitate specialized knowledge. Thus, expert advice from seasoned Capital Gains Tax Accountants is invaluable. To select the ideal consultant:

  • Experience with CGT: Their expertise in Capital Gains Tax is paramount.
  • Transparent Pricing: Avoid unexpected charges by understanding their pricing upfront.
  • Reputation: Assess their credibility through reviews and testimonials.
  • Ease of Communication: Their availability during crunch times, such as tax seasons, is crucial.

Delving into HMRC’s Capital Gains Tax Directives for Landlords

HMRC has explicitly outlined how landlords should approach Capital Gains Tax. A landlord, on selling a buy-to-let property profitably, is liable to pay CGT.

HMRC’s CGT Reporting Mandates for Landlords: source

Upon property sale, landlords must file a capital gains tax property return and detail the asset disposal in their Self Assessment. An amendment in April 2020 necessitated landlords to report and submit CGT within 30 days of the sale. However, the Autumn Budget 2021 extended this to 60 days, providing landlords with more leeway.

The Institute of Chartered Accountants advises buy-to-let investors, who’ve detailed a recent property sale in their Self Assessment, to promptly submit a physical CGT return.

Explore:  15 Interesting Accounting Startups in Cambridge, Cambridgeshire, UK

Submission Guidelines for CGT Returns:

After including a property sale in a Self Assessment return, online CGT return submission becomes unfeasible. Thus, landlords must present their ‘PPD’ CGT return before their Self Assessment. Importantly, if the Self Assessment is completed within 60 days following the property sale, a PPD isn’t mandated.

For understanding CGT obligations, the government offers a dedicated calculator. From April 2020, HMRC’s UK property disposal service has been the mandated channel for CGT reporting and payment.

Implications of Non-adherence:

Non-compliance results in penalties. The penalty quantum is directly proportional to the delay. For instance, a delay up to six months incurs a £100 penalty.

The Rising Trajectory of Capital Gains Tax Among Landlords

HMRC data reveals a marked 42% uptick in CGT revenue for 2020-21 compared to the previous fiscal year. This trend is attributed to several factors such as escalating regulations, mounting costs, and the possibility of CGT rates aligning with income tax rates. A consistent rise in property prices in several regions further compounds the CGT obligations of landlords.

A Deep Dive into Private Residence Relief source

Private Residence Relief (PRR) is an automatic tax relief activated upon property sale. Full relief is granted if the property is your primary residence. For secondary or buy-to-let properties, CGT is applicable, but potential reliefs are based on previous residence periods in the property.

Calculation Dynamics of Private Residence Relief:

The relief quantum hinges on the profit from the property sale and the duration of residence. Complete relief is accorded for the residence period and an additional nine months thereafter.

Explore:  Unveiling Cardiff's Premier Accounting Marvels: A Journey through Financial Excellence

Transition from 18 Months to 9 Months in PRR:

Till April 2020, the relief spanned the last 18 months of property ownership. Post this timeframe, the relief is limited to nine months subsequent to vacating.

Simultaneously Claiming Private Residence Relief and Letting Relief:

From April 2020, only cohabiting landlords and tenants qualify for Letting Relief. Therefore, when renting a section of your primary residence, both Private Residence Relief and Letting Relief are attainable.


The landscape of Capital Gains Tax in the UK is ever-evolving, especially concerning landlords. Staying abreast of the changes and seeking advice from professional capital gains tax accountants ensures compliance, savings, and peace of mind amidst the complexities of taxation.

Ready to Promote Your Brand with Finance Magazine?

Looking to reach a targeted audience of finance professionals and decision-makers? Finance Magazine offers sponsored article opportunities and partnerships to help you showcase your brand and drive sales. Learn more about our advertising options and reach out to us today! Click here to discuss sponsored articles and partnerships.

Maximize your brand visibility and engage with a highly engaged finance audience. Contact us at [email protected] to get started. Let Finance Magazine be your platform for success!

Explore:  Meet the Disruptors: London's Most Exciting Accounting Startups & Companies

Financial Magazine

FinMag.co.uk is a leading online platform dedicated to providing up-to-date and insightful information about finance, business, and investment. As an authority in the industry, FinMag.co.uk is trusted by professionals, investors, and business owners worldwide for its accurate and reliable news and analysis.

Previous Story

Is Europe’s New Design Powerhouse Transforming the Financial Technology Landscape?

Next Story

Which Influential Finance Startups are Revolutionising Coventry’s Industry in 2023?

Latest from Blog

About us

FinMag.co.uk is a finance magazine that covers the latest news and trends in the finance industry. Its articles cover a wide range of topics, including banking, investment, insurance, and technology. With a focus on providing valuable insights and analysis, FinMag.co.uk aims to keep its readers informed about the most important developments in finance and how they may impact businesses and individuals alike.



Copyright. All Rights Reserved.
Owned & operated by Unstructured.media