Question 1

What are the CGT rates on rental property for 2024/25?

Accepted Answer

From 30 October 2024, the Capital Gains Tax rate on residential property is 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers. These rates apply to gains made on the disposal of residential property that isn't your main home.

Question 2

What is the annual exempt amount for 2024/25?

Accepted Answer

The annual exempt amount (also known as the annual exemption) for 2024/25 is £3,000 per individual. This was reduced from £6,000 in 2023/24 and £12,300 in 2022/23. This means the first £3,000 of your taxable gains in any tax year are tax-free.

Question 3

What counts as an allowable cost for CGT?

Accepted Answer

Allowable costs include: the original purchase price, purchase costs (stamp duty, solicitor fees, survey fees), selling costs (estate agent fees, solicitor fees, EPC certificates), and capital improvement costs. Capital improvements are things that enhance the property's value — like extensions, new kitchens or bathrooms. Day-to-day maintenance and repairs are not allowable.

Question 4

Do I have to report and pay within 60 days?

Accepted Answer

Yes. Since April 2020, UK residents must report the disposal of a residential property to HMRC within 60 days of completion and pay any CGT due at the same time. This applies even if you file a Self Assessment tax return. Late reporting can result in penalties starting at £100.

Question 5

Can I carry forward a capital loss?

Accepted Answer

Yes. If you make a capital loss (i.e. you sell a property for less than you paid after allowable costs), you can carry this loss forward indefinitely and set it against future capital gains. You must report the loss to HMRC within 4 years of the end of the tax year in which it occurred.

Question 6

Is there CGT on transfers between spouses?

Accepted Answer

No. Transfers of assets between married couples and civil partners living together are treated as 'no gain, no loss' for CGT purposes. However, this changes if you separate — from the 2023/24 tax year, you have up to 3 years after separation to transfer assets without CGT.

Question 7

What about Principal Private Residence Relief?

Accepted Answer

If the property was your main home at any point, you may qualify for Principal Private Residence (PPR) Relief for the period you lived there, plus the final 9 months of ownership (regardless of whether you lived in it). The relief is calculated proportionally based on the time it was your main residence versus the total ownership period.

Taxpayer Band	Previous Rate	Current Rate
Basic rate taxpayer	18%	18%
Higher / additional rate	28%	24%

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UK CGT Rates on Residential Property (2024/25)

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