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How to Calculate CGT on Property: Worked Examples

Work out capital gains tax on a UK property for 2026/27: the 18% and 24% band split, Private Residence Relief apportioned, lettings relief and inherited cost.

By · Updated 2026-07-27

Start With the Gain, Then the Rate That Trips People Up

The whole internet agrees on the outline: residential property gains are taxed at 18% or 24%, you get a £3,000 The Capital Gains Tax allowance: the slice of gains you can realise each tax year before any CGT is due. It is £3,000 for 2026/27 and cannot be carried forward if unused., your main home is covered by Private Residence Relief: The relief that exempts the gain on your only or main home from Capital Gains Tax - for the period you lived there plus a final period of ownership (9 months, or 36 months if you are disabled or a long-term care-home resident), apportioned over the total time you owned it., and you report and pay within 60 days. All true, and none of it tells you what you will actually pay. The gain is the easy part: sale price, less what you paid, less buying and selling costs and any capital improvements. The rate is where the money hides.

"18% in your basic-rate band, 24% above" is written as though you pick the one that matches your income. You do not. Your taxable gain stacks on top of your income: only the slice that still fits below the £50,270 higher-rate threshold is taxed at 18%, and everything above it at 24%. One sale, one taxpayer, both rates.

Example A - a buy-to-let that was never your home. You buy for £250,000 and sell for £350,000, with £5,000 of buying and selling costs and £15,000 of improvements. Gain = £350,000 − £250,000 − £5,000 − £15,000 = £80,000. Less the £3,000 allowance leaves £77,000 taxable. On £45,000 of income your unused basic-rate band is £50,270 − £45,000 = £5,270, taxed at 18% = £948.60. The remaining £71,730 is taxed at 24% = £17,215.20. Total Capital Gains Tax = £18,163.80, an effective 22.7% on the full gain.

A single property gain taxed at both 18% and 24%A £77,000 taxable gain (a £80,000 gain less the £3,000 annual exempt amount) made by someone with £45,000 of income in 2026/27. The gain stacks on top of income, so the first £5,270 fills the unused basic-rate band up to the £50,270 higher-rate threshold and is taxed at 18%, giving £948.60. The remaining £71,730 sits above the threshold and is taxed at 24%, giving £17,215.20. Total Capital Gains Tax is £18,163.80.One property gain, two CGT rates18%taxed at 24% (above £50,270)£71,730£50,270£80,000 gain, less £3,000 annual exempt amount = £77,000 taxableTotal CGT £18,163.80: £948.60 at 18% plus £17,215.20 at 24%Source: gov.uk Capital Gains Tax rates · CGT applies UK-wideukfinancetools.co.uk
Example A's £77,000 taxable gain sits on £45,000 of income: only £5,270 falls in the 18% band, the rest pays 24%.

Those are the Property CGT Calculator's own default figures, so you can reproduce this exact number live and then change it to yours.

Scottish taxpayers use the UK threshold. Capital Gains Tax is not devolved. Scottish Income Tax bands apply to your salary, but the 18%/24% split still measures against the UK-wide £50,270.

When the Property Was Once Your Home

If you lived in it as your only or main home for part of the time you owned it, Private Residence Relief exempts a matching part of the gain. The exempt slice is the months it was your main home plus a final period, capped at the total months owned, over the total months owned:

exempt fraction = min(main-home months + final period, months owned) ÷ months owned

The final period is 9 months as standard. Almost every guide stops there. It is 36 months under section 225E TCGA 1992 where, at the date of sale, you or your spouse or civil partner is a disabled person or a long-term resident in a care home, and neither of you holds an interest in another home that would itself qualify for relief. If that is you, set the final period to 36 months in the calculator and it applies the longer period for you (HMRC CG64986).

Example B - lived in, then let. You own for 12 years (144 months) and live in it for the first 7 (84 months), then let it out. Exempt months = 84 + 9 = 93; exempt fraction = 93 ÷ 144 = 64.6%. On a £120,000 gain, Private Residence Relief exempts £77,500, leaving £42,500 chargeable before the allowance and the band test.

Now the trap. Plenty of former landlords still expect up to £40,000 of A Capital Gains Tax relief on a former main home that was let. Since April 2020 it applies only where you shared occupancy with the tenant (e.g. a lodger), capped at £40,000. on top. Since 6 April 2020 it applies only where you shared occupancy with your tenant - a lodger in the home you were living in. Move out and let the whole place, as in Example B, and your lettings relief is £0. The calculator apportions relief by time and deliberately does not work out lettings relief or deemed-occupation periods, because both need facts about the property a calculator cannot sensibly ask for (HMRC CG64710). If either applies to you, your exempt slice is larger than the time apportionment alone - read HMRC helpsheet HS283 or take advice.

Property You Inherited or Were Given

The number that frightens people - the full sale price - is not your gain. Your base cost is the market value when you acquired it, not what the previous owner paid. For an inherited property that is the probate value at the date of death, so you are only taxed on the growth since then.

Example C - an inherited house. You inherit a property valued at £300,000 for probate and sell it four years later for £340,000, with £6,000 of selling costs. Your gain is £340,000 − £300,000 − £6,000 = £34,000 - the growth since the date of death, not since the deceased first bought it. Less the £3,000 allowance, £31,000 is taxable and then band-tested.

Owned With Someone Else

A jointly owned property is not one gain, it is two half-gains, and each owner works out their own. That doubles the shelter: two £3,000 allowances, and each half tested against that owner's own income.

Example D - a couple owning 50/50. Take Example A's £80,000 gain split in half: £40,000 each. Each partner deducts their own £3,000 allowance, so £6,000 is tax-free between them rather than £3,000. If both have income low enough to leave £37,000 of basic-rate band each, both halves can be taxed largely at 18% instead of 24% - the split moves gain out of the higher rate as well as doubling the allowance.

What You Can Deduct, and the Two Times You Report

Deduct the price you paid, the Stamp Duty Land Tax you paid on purchase, legal and estate-agent fees on both ends, and capital improvements that added value - an extension or a new kitchen, but not repairs, maintenance or mortgage interest. Getting the improvements in is often the difference between rates.

Then you report twice. If tax is due you must file and pay within 60 days of completion through HMRC's Capital Gains Tax on UK property account, and report the same disposal again on your Self Assessment return after the tax year ends - the 60-day payment is effectively a payment on account against the final bill. Our 60-day CGT reporting guide walks through the account itself. For gains on shares instead, see how to calculate CGT on shares.

Sources: GOV.UK Capital Gains Tax rates; HMRC HS283 (Private Residence Relief); HMRC CG64985 (final-period apportionment); HMRC CG64710 (lettings relief); TCGA 1992 s.225E (36-month final period); GOV.UK Report and pay CGT on UK property.

Frequently Asked Questions

Do I pay 18% or 24% CGT on a property?

Often both, on the same sale. Your taxable gain is added on top of your taxable income: the part that still fits below the £50,270 higher-rate threshold is taxed at 18%, and anything above it at 24%. Someone on £45,000 with a £77,000 taxable gain pays 18% on £5,270 and 24% on the remaining £71,730.

How do I work out CGT on a property I inherited?

Your base cost is the probate (market) value at the date of death, not what the deceased paid for it. So the taxable gain is only the growth between the date of death and the sale, less your buying and selling costs and the £3,000 annual exempt amount. Inheriting at a £300,000 probate value and selling for £340,000 with £6,000 of costs gives a £34,000 gain, not £340,000.

I lived in the house first and then rented it out - do I still pay CGT?

Usually a reduced amount. Private Residence Relief exempts the fraction of the gain matching the months it was your main home plus a final period (9 months, or 36 if you are disabled or in long-term care), capped at and divided by the total months you owned it. The let period is taxable. Do not assume the old £40,000 lettings relief still helps - since April 2020 it only applies if you shared the home with your tenant.

How is CGT split if I own the property with my spouse or partner?

Each owner reports their share of the gain separately and each gets their own £3,000 annual exempt amount, so a couple shelters £6,000 between them. Each half is also tested against that person's own income, so splitting a gain can keep more of it in the 18% band instead of 24%.

What costs can I deduct from the gain on a property?

The purchase price, the Stamp Duty Land Tax paid on purchase, legal and estate-agent fees on the buy and the sale, and capital improvements that added value such as an extension. You cannot deduct repairs, maintenance, mortgage interest, or your own time. Capital improvements are the most-missed deduction.

When do I report and pay CGT on a property sale?

If tax is due, within 60 days of completion through HMRC's Capital Gains Tax on UK property account - and again on your Self Assessment return after the tax year ends. The 60-day payment is effectively a payment on account against the final Self Assessment figure, so you report the same disposal twice.

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