Sold a UK Property? The 60-Day CGT Return You Might Not Know About

One of HMRC's best-kept secrets - from a compliance perspective - is the 60-day CGT return. Introduced for UK residents in October 2021 (extended from the original 30-day window), it requires anyone selling a UK residential property with a capital gain to file a standalone digital return and pay the tax due within 60 days of the completion date.

Who is in scope?

• UK residents selling a residential property (including buy-to-let, second homes, and inherited properties) where there is a chargeable gain - i.e., where Principal Private Residence (PPR) relief does not fully cover the gain.
• Non-UK residents selling any UK property (residential or commercial) - the 60-day rule applies to all UK property disposals for non-residents, regardless of whether a gain arises.
• Trustees and personal representatives disposing of UK residential property held in trust or in a deceased's estate.

Properties that are fully covered by PPR relief - where the property was your main home throughout the entire period of ownership - do not need to be reported. But any period of letting, periods of absence beyond the permitted final period, or periods before the property became your home will create a partial gain that must be reported.

How to calculate your gain

The basic calculation is: proceeds minus original purchase price minus allowable costs (solicitor fees, stamp duty paid on purchase, improvement costs, disposal costs). The resulting gain is then reduced by any reliefs available - PPR, lettings relief (limited post-2020), or the annual CGT exempt amount (£3,000 in 2026/27).

The capital gains tax rate on residential property is 18% (basic rate) or 24% (higher rate) from 30 October 2024 - an increase from the previous 18%/28% rates. The rate used depends on whether the gain, when added to your taxable income in the year, falls within the basic or higher rate band. This interaction with income means the optimal year to sell is sometimes not the year with the highest gain - professional modelling can identify which tax year produces the better outcome.

Reliefs that reduce your bill

• Principal Private Residence (PPR) Relief: For every complete month the property was your main residence, that proportion of the gain is exempt. The last 9 months of ownership always qualify (even if not in occupation), providing valuable relief for properties that were lived in and subsequently let.
• Improvement costs: Extensions, loft conversions, new kitchens (if an improvement rather than repair), and other capital works reduce your gain. Cosmetic repairs and maintenance do not count.
• Allowable purchase costs: Solicitor fees, surveyor fees, and SDLT paid on the original purchase are all deductible in arriving at the gain.
• Annual CGT exempt amount: £3,000 for 2026/27. This is not carried forward - if unused by 5 April, it is lost forever. Using it against property gains each year through strategic disposals is a key planning tool for portfolio landlords.

The penalty escalation timetable

Penalties for missing the 60-day deadline are automatic and do not require a deliberate error - being one day late triggers the first penalty. The structure is:

• Day 61: Automatic £100 late filing penalty
• 6 months after deadline: Further £300 penalty (or 5% of tax due if higher)
• 12 months after deadline: Additional £300 penalty (or 5% of tax due if higher)
• Late payment interest accrues from day 61 on any unpaid tax at HMRC's current rate

For a sale with a significant CGT liability, the interest alone can add thousands of pounds over a matter of months. HMRC has been actively using its data-matching capability (Land Registry data, SDLT returns, mortgage redemption data) to identify unreported property sales and issue automatic compliance checks.

How to file

The 60-day return is filed through HMRC's "Report and pay CGT on UK property" service - a dedicated portal separate from your Self Assessment account. You will need a Government Gateway account and your property details, cost history, and relief calculations ready. Payment is made simultaneously through the same portal. If your position is later revised (for example, because additional improvement costs are found), an amendment can be made, with any overpayment refunded or underpayment pursued through Self Assessment.