Do I pay CGT within 60 days on UK buy-to-let?
UK residents must report and pay Capital Gains Tax within 60 days of legal completion when selling a buy-to-let. Know the deadlines, rates, and penalties.
Yes, you must report and pay Capital Gains Tax (CGT) on a buy-to-let property within 60 days of legal completion if a tax liability arises. This strict statutory rule applies to all UK residents disposing of residential property where tax is due.
Key takeaways: The 60-day CGT property rule
- The 60-day clock starts on the actual date of legal completion, not when contracts are exchanged.
- Both reporting and payment must be finalised through HMRC within this 60-day window to avoid penalties.
- Residential tax rates of 18% and 24% apply to these sales, depending on your personal income tax band.
- Legitimate deductions like buying costs, selling costs, and capital improvements can reduce your overall taxable gain.
Do I really have to report and pay CGT within 60 days?
Yes, you must legally report and pay the estimated tax within 60 days of completion. Under current UK tax legislation, the old system of waiting until the annual Self Assessment deadline is no longer permitted for residential property gains.
| Feature | Old Self Assessment System | Current 60-Day Rule |
|---|---|---|
| Reporting Deadline | By 31 January following the end of the tax year | Within 60 days of legal completion |
| Payment Deadline | By 31 January following the end of the tax year | Within 60 days of legal completion |
| Scope | All capital assets | UK residential property with tax due |
What is the 60-day Capital Gains Tax rule for property?
The 60-day rule is a statutory requirement under Schedule 2ZA of the Taxation of Chargeable Gains Act (TCGA) 1992, which obliges UK residents to file a return and make a payment on account for residential property gains. The strict 60-day timeframe officially begins on the date of legal completion rather than the exchange of contracts.
What are the residential Capital Gains Tax rates and allowances?
The tax rate you pay depends on your total taxable income, with gains calculated after applying your annual tax-free allowance. For the 2025/26 tax year, the individual annual exempt amount is £3,000, meaning any gain below this threshold is tax-free.
| Tax Band | Residential Property CGT Rate | Annual Exempt Amount (2025/26) |
|---|---|---|
| Basic Rate Band | 18% | £3,000 |
| Higher or Additional Rate Band | 24% | £3,000 |
What costs can you deduct to reduce your CGT bill?
You can deduct several allowable costs from the sale price to significantly reduce your taxable capital gain. HMRC allows property owners to offset expenses directly associated with acquiring, improving, and selling the asset.
- The original purchase price paid for the buy-to-let property.
- Stamp Duty Land Tax (SDLT) paid at the time of purchase.
- Solicitor, legal, and conveyancing fees incurred during both purchase and sale.
- Estate agent fees and marketing costs incurred to secure a buyer.
- Capital improvement costs, such as building an extension or a structural conversion, though normal maintenance is excluded.
What are the penalties for missing the 60-day deadline?
HMRC imposes strict penalties if you fail to report your property disposal or pay the required tax within the 60-day window. These charges accumulate quickly from the 61st day after completion.
- An automatic £100 late filing penalty is issued immediately if the return is not submitted on time.
- Daily penalties may be charged if the return remains outstanding after three months.
- Late payment interest begins accruing daily on any unpaid tax from the 60-day deadline until the balance is settled.
Are there any exceptions to the 60-day reporting rule?
There is a very narrow exception to this requirement if you submit a full annual tax return quickly. Specifically, you do not need to file the separate 60-day property return if you file your complete Self Assessment tax return before the 60-day deadline expires.
According to Schedule 2ZA, paragraph 5 of the TCGA 1992, this exception is legal but rare in practice. It typically only occurs if you complete your property sale close to the end of the tax year and file your comprehensive annual return immediately.
How do I report the gain and pay the tax to HMRC?
Reporting your gain requires using HMRC's dedicated digital portal for property disposals. Setting up your access early helps prevent administrative delays that could push you past the 60-day limit.
- Log into your HMRC Government Gateway account or create one if you do not have it.
- Set up a 'Capital Gains Tax on UK property' account through the official portal.
- Gather your key figures, including the purchase price, legal fees, improvement costs, and final sale price.
- Submit the online return detailing your net capital gain and estimated liability.
- Pay the calculated tax using the payment reference code provided by HMRC.
How does the 60-day payment fit with Self Assessment?
The tax you pay within the 60-day window is treated strictly as a payment on account. It does not replace your annual tax filing duties, meaning you must still declare the transaction on your annual Self Assessment return.
When completing your Self Assessment return, you will input the details of the gain and the tax already paid. HMRC will credit your account with the 60-day payment, ensuring you do not suffer double taxation on the same transaction.
Do I have to pay Capital Gains Tax if I sell a buy-to-let property?
Yes, you must pay Capital Gains Tax if the property sale generates a profit that exceeds your annual exempt amount of £3,000. Because a buy-to-let is an investment and not your primary residence, you generally cannot claim Private Residence Relief on the gain.
Does the 60-day rule start from exchange or completion?
The 60-day reporting and payment window starts strictly from the legal completion date of the sale. The date you exchange contracts is not the trigger for the 60-day deadline.
Can my accountant file the 60-day CGT return on my behalf?
Yes, an accountant or authorised tax adviser can file the return for you. You must set up the digital authorisation through your HMRC Government Gateway account before they can submit the figures.
What happens if I make a loss on the sale of a residential property?
If you make a loss, there is no requirement to report the transaction within the 60-day window. However, you should report the loss on your annual Self Assessment return so you can offset it against other capital gains.
Is there an exemption from CGT if I lived in the buy-to-let property previously?
You may qualify for partial Private Residence Relief for the years you actually occupied the property as your primary home. Tax remains due on the proportion of the gain corresponding to the years it was rented out.