FAQ 023 | What Are the UK Capital Gains Tax (CGT) Rates as at July 2026?

Author: SJW Research & Intelligence

Brand: SJW UK Properties

UK Capital Gains Tax rates as at July 2026

(As at July 2026. Capital Gains Tax applies across the whole of the UK; for Scottish taxpayers, whether the basic or the higher rate applies is determined by reference to the Scottish income tax bands. The policy most recently published by the UK government is the authoritative source.)

1. Individuals selling a buy-to-let investment property or a second home

Where the property being sold is a buy-to-let investment or a second home, the following CGT rates generally apply:

 Basic rate taxpayer: 18%

 Higher or additional rate taxpayer: 24%

Note that a basic rate taxpayer does not necessarily pay 18% on the whole gain. Where the gain, added to taxable income for the year, takes the total above the basic rate band, the excess is generally charged at 24%.

2. The annual exempt amount

For the 2026/27 tax year, each individual has an annual exempt amount of £3,000 for capital gains. The annual exempt amount is normally deducted first, and the tax due is then calculated on the remainder under the applicable rules.

3. Capital Gains Tax is not charged on the sale price

UK Capital Gains Tax is charged on the capital gain, not on the property sale price. In general, calculating the gain may also involve taking account of the following, where they qualify under UK tax rules: the purchase price, the sale price, certain costs of purchase, certain costs of sale, qualifying capital improvements, allowable capital losses where applicable, and the annual exempt amount. The final CGT payable therefore differs from owner to owner.

4. Is a main home always subject to CGT?

Not necessarily. Where the property sold qualifies as a main residence under UK tax rules, Private Residence Relief (PRR) may in many cases give full or partial relief from Capital Gains Tax.

Overseas owners should note one point in particular: living outside the UK does not automatically make a UK property your main residence.

Under the current UK rules, where an owner lives outside the UK, a property will generally only count as a residence for a given tax year if the owner, their spouse or their civil partner has spent at least 90 nights there in that year. Where the property was acquired part-way through the year, the test is applied pro rata, and nights spent by a spouse or civil partner count towards the total. When the sale is reported, the property normally also has to be formally nominated as the only or main residence.

A situation we see often illustrates the point: parents buy a UK home for a child at university and stay there themselves for only a week or two each year. The property may feel like the family home, but it will not usually meet the conditions above.

Whether relief applies depends on how the property has actually been used and on the applicable tax rules. We recommend taking professional tax advice before selling.

5. How soon must a sale be reported? (a point for overseas owners)

After the sale of a UK residential property, a Capital Gains Tax return normally has to be made to HMRC, and any tax paid, within 60 days of completion. There is one point here that overseas owners frequently misunderstand.

Clients often ask: “I did not make a profit on this sale — I actually made a loss. Surely I do not need to report it?”

For a UK tax resident, that is broadly right: where the gain for the year falls below the annual exempt amount, a separate return is not required.

For a non-UK resident, the rule is different. Under HMRC’s current rules, a non-resident selling UK property must generally report the disposal within 60 days whether or not any tax is due, and even where the property was sold at a loss.

We therefore remind clients that the 60 days runs from the completion date, not from the end of the tax year. Late reporting can give rise to penalties and interest.

It is also worth noting that a non-resident’s reporting obligations are not limited to residential property. The sale of UK non-residential property or land, and UK property held through a corporate structure, may carry their own reporting requirements, on which professional tax advice should be taken.

Official References

The rates and rules above (as at July 2026) are compiled from UK government sources:

 GOV.UK — Capital Gains Tax: Rates and Allowances

 GOV.UK — Capital Gains Tax: What you pay it on

 HM Treasury / HMRC — Capital Gains Tax Rates

 HMRC — Capital Gains Tax for non-residents: UK residential property

 GOV.UK — Tax if you live abroad and sell your UK home

Last updated: July 2026

Disclaimer: This article is provided for general information only and does not constitute legal, tax, accounting or investment advice. UK Capital Gains Tax policy may change. Please rely on the official policy in force at the time of the transaction and the advice of a professional tax adviser.