Capital Gains Tax (CGT)
Tax on the profit from selling a rental property. From April 2024 the CGT annual exempt amount was reduced to £3,000 and residential property gains are taxed at 18% (basic rate) or 24% (higher rate). A CGT return must be filed and tax paid within 60 days of completion.
At a glance
- Annual exempt amount
- £3,000 (from April 2024)
- Rates (residential)
- 18% basic / 24% higher
- Filing window
- 60 days from completion
- Return type
- HMRC Residential Property Return
Full guide
Read the complete landlord guide on Capital Gains Tax (CGT)
Deadlines, fines and step-by-step compliance in our in-depth resource.
Open full guideWhy Capital Gains Tax (CGT) matters for landlords
CGT is the tax landlords most often get wrong because the 60-day residential property return is separate from the self-assessment cycle. Miss it and you are straight into penalties and daily interest. The shrinking annual exempt amount (£3,000) plus the 18% / 24% rate split means any gain above a small slice is taxable, and gains over multiple ownership years need to be apportioned to reflect letting versus primary-residence periods.
Official sources
LetCompliance editorial reviews this entry every quarter against the sources above. Always confirm specific duties with a qualified solicitor or your local council.
Related terms
BTL (Buy-to-Let)
A mortgage product and business model where a property is purchased specifically to rent out. Buy-to-let landlords are subject to Section 24 of the Finance Act 2015, which replaced mortgage interest relief with a 20% tax credit. Stamp duty is higher on a second property.
Stamp Duty Land Tax (SDLT)
Tax on property purchases in England and Northern Ireland. Buy-to-let purchases above £40,000 incur a 5% surcharge on top of the standard rates (rising to higher in 2026). Check HMRC for current bands.
CO Alarm (Carbon Monoxide Alarm)
Required from 1 October 2022 in every room with a fixed combustion appliance (excluding gas cookers) in private rented homes in England. The landlord must ensure an alarm is present and in working order at the start of each tenancy. Maximum civil penalty: £5,000 per property.
Compliance Score
A 0-100 score LetCompliance assigns to each property based on how up-to-date its safety certificates and tenancy documents are. 100 means Gas Safety, EICR, EPC, deposit protection and Right to Rent are all current; the score drops as deadlines approach and is recalculated daily.
Council Tax
The tax charged on residential property by the local authority. Tenants are usually liable while the property is let as their main residence. Landlords become liable during void periods and for most HMOs (where each tenant has their own AST).
CP12 (Gas Safety Record)
The document issued after an annual gas safety check by a Gas Safe registered engineer, commonly called a Gas Safety Certificate. Landlords must renew it every 12 months, give the tenant a copy within 28 days of the check, and give new tenants a copy before they move in. Non-compliance is a criminal offence under the Gas Safety (Installation and Use) Regulations 1998.