What is the 60 day rule for CGT?

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The 60-day rule means that if you sell a residential property in the UK and make a profit, you must report the sale to HMRC and pay the Capital Gains Tax (CGT) you owe within 60 days of the completion date.

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A Simple Guide to the 60-Day Capital Gains Tax Rule

For many years, if you sold a property and made a profit, you didn’t have to pay the tax until you filed your annual Self Assessment tax return—sometimes up to 22 months later.

That system changed in October 2021. Now, HMRC demands that you calculate, report, and pay the tax much faster. Here is a simple breakdown of how it works for the current tax year (2025/26).

Does This Apply to Me?

You generally need to follow the 60-day rule if you are a UK resident and you sell (or “dispose of”) a residential property where you have made a taxable profit.

This typically includes:

• Buy-to-let properties (rental homes).
• Second homes (like holiday cottages).
• Inherited properties (if you didn’t live there as your main home).
• Homes with mixed use (e.g., a house that is partially a business).

You usually do NOT need to report within 60 days if:

• It is your main home (Private Residence Relief usually covers this).
• You sold the property at a loss.
• Your total gains for the year are under your tax-free allowance (£3,000).
• You transferred the property to your spouse or civil partner.

The Key Deadline: Completion vs. Exchange

It is vital to know the difference between your dates:

• Exchange of Contracts: This is when the deal becomes legally binding. (This date fixes the tax year the gain falls into).
• Completion Date: This is when the money changes hands and keys are handed over. The 60-day countdown starts from this date.

Example: If you complete the sale on 1st March, you must report and pay by roughly 30th April.

How Much Tax Will I Pay?

For the 2025/26 tax year, the rates for residential property are:

• 18% if you are a basic-rate taxpayer.
• 24% if you are a higher or additional-rate taxpayer.

You also get an annual tax-free allowance (Annual Exempt Amount). For 2025/26, this is £3,000. You only pay tax on the profit above this amount (and after deducting costs like solicitor fees and estate agent fees).

How to Report and Pay

You cannot just wait for your yearly tax return. You must report this separately first.

1. Create a specific account: Go to the GOV.UK website and sign up for a “Capital Gains Tax on UK property“ account. (This is different from your standard Self Assessment login).
2. Calculate your gain: Work out the profit by subtracting the purchase price and buying/selling costs from the sale price.
3. Submit the return: Fill in the figures online within the 60-day window.
4. Pay HMRC: The system will give you a payment reference number. You must pay the estimated tax by the same 60-day deadline.

What If I Miss the Deadline?

HMRC charges penalties for late reporting and late payment.

• Late filing: You may receive an automatic £100 penalty if you miss the 60-day window, even if you pay the tax on time.
• Interest: Interest will start accruing on unpaid tax from the deadline day.

Summary Checklist

• [ ] Did you sell a residential property that isn’t your main home?
• [ ] Is your profit higher than £3,000?
• [ ] Have you set up a “Capital Gains Tax on UK property” account?
• [ ] Action: Report and pay within 60 days of the completion date

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