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Property capital gains tax

We explore the UK capital gains tax implications of disposing of UK property by both UK and non-UK residents, including outlining the filing requirements and relevant deadlines.

For individuals (including UK resident trustees and personal representatives) who dispose of UK property, capital gains tax can be a significant cost, especially given the substantial increase in many property values over time. Capital gains tax is the tax levied on the capital gain (profit) realized from the disposal of an asset. In most instances, UK capital gains tax arises when an individual disposes of a property that has increased in value since acquisition. The disposal could be by way of gift, transfer or sale to a third party. On disposal, the capital gain will then be subject to capital gains tax.

For example, if a UK resident purchased a UK residential property for £200,000 and later sold the property for £500,000, capital gains tax would be payable on the £300,000 profit, minus any allowable expenses. The capital gains tax annual exemption may be available to offset against the capital gain arising (£3,000 for the 2024/25 tax year). The individual may also be eligible for capital gains tax reliefs such as private residence or lettings relief. In the context of UK residential property disposals, understanding the capital gains tax implications for both UK and non-UK residents is essential as the method for calculating the capital gain or loss arising is different