Capital Gains Tax Estimate for Landlords
An estimate of the CGT due when you sell a rental property.
Total gain
£37,500
Taxable gain after allowance
£34,500
Estimated CGT
£8,280
Net proceeds after CGT
£247,220
Effective rate on the gain
22.08%
What this calculator tells you
Capital gains tax on residential property is charged at 18% for gains falling within the basic-rate band and 24% above it. The gain is the sale price less the original purchase price, the costs of buying and selling, and any genuine capital improvements. Routine repairs do not count — they should have been claimed against rental income instead.
How it works
- 1Gain = sale price − purchase price − buying costs − capital improvements − selling costs.
- 2Deduct the annual exempt amount if you have not used it elsewhere.
- 3Apply 18% or 24% depending on where the gain sits against your income.
- 4A UK residential property disposal must be reported and the tax paid within 60 days of completion.
Worked example
Selling for £260,000 a property bought for £200,000
- Gain: £260,000 − £200,000 − £10,000 − £8,000 − £4,500 = £37,500.
- Less the £3,000 annual exempt amount = £34,500 taxable.
- At 24%: £8,280 of capital gains tax.
Keeping receipts for capital improvements is worth real money — the £8,000 of improvements in this example saved £1,920 in tax.
Frequently asked questions
When do I have to pay CGT on a rental sale?
Within 60 days of completion, via a UK Property Disposal return. Missing that deadline attracts penalties even if the tax itself is eventually paid.
Can I deduct the cost of a new kitchen?
Only where it is a genuine improvement rather than a like-for-like replacement. Replacing a tired kitchen with an equivalent one is a repair, deductible against rental income; adding a kitchen where none existed, or a substantial upgrade, is capital.
Is this calculator a substitute for advice?
No. It gives an estimate. Reliefs such as private residence relief and lettings relief, joint ownership and losses carried forward can change the answer significantly — take advice before you exchange.
Related content
These calculators give general estimates for UK private landlords and letting agents, not legal, tax or financial advice. Figures depend on your circumstances and on the rules in your part of the UK — check the detail or take advice before acting.