Selling a rental property can trigger a Capital Gains Tax (CGT) bill on the profit you've made - and the rules around it catch many landlords off guard, particularly the requirement to report and pay within 60 days of completion, rather than waiting for the usual Self Assessment deadline.
The amount of CGT you owe depends on your gain after deducting allowable costs (such as legal fees, agent fees, and certain improvement costs), any Private Residence Relief if the property was ever your home, and the £3,000 annual exempt amount. What's left is then taxed at 18% or 24%, depending on your other income for the year - and the calculation can get more complex if your income straddles the basic-rate threshold.
This guide walks through exactly how the calculation works, what costs you can and can't deduct, how Private Residence Relief is worked out if you ever lived in the property, and - critically - what you need to do to meet the 60-day reporting deadline and avoid penalties.
The full guide will cover: