Buy to Let CGT Calculator UK 2026/27

Buy to Let CGT 2026/27 Calculator

Enter your figures below. The calculator applies the 2026/27 rates and personal allowance, deducts allowable acquisition and disposal costs plus the £3,000 annual exempt amount, and splits the taxable gain between the 18% and 24% bands. It also models a 50/50 spouse-transfer scenario for comparison.

The 2024 Spring Budget — CGT changes that took effect

The Spring Budget 2024 delivered the most significant changes to UK property CGT in over a decade. Three matter most for buy-to-let landlords.

1. Higher rate cut from 28% to 24%

From 6 April 2024, the higher rate of CGT on residential property fell from 28% to 24%. The basic rate of 18% was unchanged. This was the first reduction in residential CGT in over 20 years, and continues into 2026/27 at the same level. For a higher-rate landlord realising a £100,000 taxable gain, the cut saves £4,000 of tax compared to the pre-2024 regime.

2. Annual exempt amount slashed to £3,000

The annual exempt amount (AEA) — the slice of gains exempt from CGT each year — was reduced from £12,300 (2022/23) to £6,000 (2023/24) and then to £3,000 from April 2024, remaining at £3,000 in 2026/27. Trusts have an AEA of £1,500. The reduction means many landlords with modest gains who previously paid no CGT are now in scope. For a higher-rate landlord, the AEA cut from £12,300 to £3,000 increases the tax bill by approximately £2,232 on every disposal.

3. Multiple Dwellings Relief abolished

Multiple Dwellings Relief (MDR), which reduced SDLT on transactions involving two or more residential dwellings, was abolished for completions on or after 1 June 2024. This affects buy-to-let portfolio purchases and is mentioned here because it materially changed the acquisition arithmetic for new landlords.

4. Furnished Holiday Lettings regime ended

From 6 April 2025, the Furnished Holiday Lettings (FHL) regime was abolished, removing the more generous CGT (Business Asset Disposal Relief and rollover relief) and income tax (full mortgage interest deductibility, pension contributions counted as 'relevant earnings') treatment that previously applied to qualifying holiday lets. Landlords disposing of former FHL properties in 2026/27 are now taxed under standard residential CGT rules unless a transitional concession applies.

All four changes are confirmed in Finance (No. 2) Act 2024 and the Spring Budget 2024 documents.

2026/27 CGT rates and thresholds at a glance

The table below summarises every CGT-related figure relevant to buy-to-let disposals in 2026/27.

The personal allowance and basic-rate band have been frozen at £12,570 and £50,270 since 2021/22 under the personal-allowance freeze announced by the then-Chancellor, contributing to fiscal drag that pulls many landlords into the higher-rate band. The freeze is currently scheduled to continue through to 5 April 2028.

How to calculate buy-to-let CGT step by step

The HMRC Capital Gains Manual section CG14250 sets out the official methodology. Five steps for a typical buy-to-let disposal:

Step 1: Calculate disposal proceeds

The amount you actually receive — sale price net of estate agent commission and solicitor's conveyancing legal fees on the sale, plus valuation costs required to effect the sale. If you sold below market value to a connected party (family, business associate), HMRC will substitute the open market value (section 17 TCGA 1992).

Step 2: Deduct the allowable base cost (acquisition cost)

The original purchase price plus stamp duty land tax paid on the original purchase (including the 3% second-property surcharge), conveyancing legal fees on acquisition, search fees, and valuation/survey fees paid to acquire the property.

Step 3: Deduct allowable capital improvements

Improvements that are reflected in the property at the time of sale. Allowable: extensions, loft conversions, new kitchens or bathrooms where none previously existed (replacements like-for-like are repairs, not improvements), central heating systems newly installed, double glazing newly installed, conservatories, garages, landscaping that creates new structures. Not allowable: redecoration, routine maintenance, replacement of broken items, deferred maintenance.

Step 4: Apply the £3,000 annual exempt amount

Deduct £3,000 (or £1,500 for trusts) from the taxable gain. Each individual has their own £3,000 AEA, which is one of the key planning levers for spouse-transfer strategies. The AEA cannot be carried forward or back to other tax years.

Step 5: Apply 18% or 24% depending on income

Add your taxable income for the year (after personal allowance) to the taxable gain. The portion of the gain falling within the basic-rate band (income up to £50,270) is taxed at 18%. The portion above the basic-rate threshold is taxed at 24%. Most higher-rate taxpayers see their entire gain taxed at 24%; basic-rate taxpayers may see a split.

Worked example 1: higher-rate landlord, single owner

Emma is a higher-rate taxpayer (earning £75,000 salary as a marketing director). She bought a buy-to-let in 2018 for £180,000 and is selling it in October 2026 for £320,000.

Costs:

• Original SDLT (including 3% surcharge): £6,900
• Legal fees on purchase: £1,200
• Survey on purchase: £550
• Kitchen replacement (new larger layout, 2022): £18,500
• Loft conversion adding bedroom (2024): £42,000
• Estate agent fee on sale: £5,400 (1.8% inc VAT)
• Legal fees on sale: £950

CGT calculation:

Emma's total CGT due is £14,760, payable to HMRC within 60 days of completion via the UK Property CGT Service. She must also include the gain on her 2026/27 self-assessment return (due 31 January 2028), where the £14,760 paid will be credited against her overall tax position.

Worked example 2: basic-rate landlord with band split

David is a part-time landlord earning £35,000 from his employed work in 2026/27. He bought a buy-to-let in 2014 for £125,000 and is selling it in February 2027 for £215,000.

Costs:

• Original SDLT (no surcharge — pre-April 2016): £1,250
• Legal fees on purchase: £950
• New bathroom + ensuite added (2019): £12,000
• Double glazing installed throughout (2021): £8,500
• Estate agent fee on sale: £3,225 (1.5% inc VAT)
• Legal fees on sale: £750

CGT calculation:

Band split: David's taxable income is £35,000 (after the £12,570 personal allowance he has £22,430 of basic-rate band used). The remaining basic-rate band is £50,270 - £35,000 = £15,270. So £15,270 of the gain is taxed at 18% (= £2,749) and the remaining £45,055 at 24% (= £10,813).

Total CGT: £13,562, payable within 60 days of completion. David's basic-rate band was partially preserved despite the gain, saving him £2,290 vs an outright higher-rate calculation.

Worked example 3: spouse transfer strategy

Joanna (higher-rate, £90,000 salary) bought a buy-to-let alone in 2017 for £160,000. She is selling it in May 2026 for £290,000. Her husband Mark earns £18,000 (basic-rate, well below £50,270). Joanna transfers 50% of the property to Mark in February 2026, three months before exchange, via a Declaration of Trust registered at Land Registry.

Without spouse transfer (Joanna alone):

With 50/50 spouse transfer:

Joanna's half: chargeable gain £51,000, AEA £3,000, taxable £48,000 all at 24% = £11,520.

Mark's half: chargeable gain £51,000, AEA £3,000, taxable £48,000. Mark has £32,270 remaining basic-rate band (£50,270 - £18,000), so £32,270 at 18% = £5,809, and £15,730 at 24% = £3,775. Mark's total = £9,584.

Combined CGT: £21,104, saving £2,656 vs the single-owner scenario. The saving comes from using both £3,000 AEAs (£6,000 combined exemption) and pushing £32,270 of gain into Mark's unused basic-rate band.

Transfer requirements:

• Couples must be legally married or in a registered civil partnership (s.58 TCGA 1992).
• Transfer must be genuine, not a sham; document as Declaration of Trust or full Land Registry transfer.
• Transfer must complete (legally registered) before contracts are exchanged on the sale.
• Both spouses then submit their own 60-day report to HMRC.
• Where there is a mortgage, the transferring spouse must usually consent and may attract SDLT on the share transferred above the SDLT threshold.

The 60-day reporting rule explained

Since 27 October 2021, individuals disposing of UK residential property must report and pay any CGT due within 60 days of completion. The rule applies to:

• Buy-to-let landlords selling rental property
• Second-home owners selling holiday homes or pied-à-terre flats
• Beneficiaries selling property inherited recently (where the probate value differs from the sale price)
• Anyone selling property that has not been their main residence for the entire ownership period
• Non-UK residents selling any UK residential property (this rule pre-dates 2020)

The reporting deadline does not apply if:

• The property has been your only or main home throughout the entire ownership period (full PPR exemption)
• The gain after AEA, losses and reliefs is nil
• The disposal is exempt (e.g. spouse transfer, charitable gift)

How to file a 60-day report

1. Set up a Government Gateway account if you do not have one (gov.uk/log-in-register-hmrc-online-services).
2. Sign in to the UK Property Capital Gains Tax Service.
3. Enter property address, completion date, sale price, original purchase price, acquisition costs, improvement costs and other allowable deductions.
4. Enter estimated taxable income for the tax year so far.
5. The service calculates CGT and accepts online payment by debit card, bank transfer or direct debit.
6. Include the gain on your self-assessment return for the year — the 60-day payment is credited against your final tax position.

Penalties for late reporting

Late penalties accumulate quickly. A 12-month late report on a £15,000 tax bill attracts approximately £2,500 of penalties plus 7.75% interest. HMRC will waive penalties in limited 'reasonable excuse' cases (serious illness, postal delays affecting registered post evidence), but routine forgetfulness or accountant delays are not accepted.

Allowable deductions: what you can and cannot claim

The HMRC Capital Gains Manual section CG15180 sets out the rules on deductible expenditure. The table below summarises the most common items.

Costs of acquisition (deductible from gain)

Costs of capital improvements (deductible from gain)

Costs of disposal (deductible from gain)

Always keep receipts for six years. HMRC routinely challenges improvement claims and the burden of proof is on the taxpayer. Photographs before/after the work, contractor invoices, planning permission documents and surveyor reports all help substantiate claims.

Indexation and historic relief (legacy)

Indexation allowance — the relief that allowed CGT base cost to be uplifted in line with RPI inflation — has not applied to individuals since 5 April 1998. For property bought before that date, the base cost is the rebased value at 31 March 1982 (where elected) or the historic cost plus the frozen indexation allowance up to April 1998. Most landlords selling in 2026 acquired after 1998, so indexation does not apply.

For companies (corporation tax on chargeable gains), indexation allowance was frozen in December 2017 — disposals before December 2017 retain frozen indexation, post-December disposals do not get any further uplift. The HMRC Capital Gains Manual provides the official tables.

Taper relief (the relief that reduced gains based on length of ownership) was abolished on 6 April 2008. Disposals in 2026/27 do not get any relief for length of ownership.

Inherited property: probate base cost

If you inherited a buy-to-let property, the base cost for your future CGT is the probate value declared on the IHT account at the date of death, not the original price the deceased paid. This often crystallises a 'free uplift' because the heir's CGT is calculated only on growth since the date of death — sometimes there is no taxable gain at all if you sell shortly after probate.

Key requirements:

• The probate value must be agreed with HMRC (typically through Form IHT400 or IHT205). Where IHT is not payable, the probate value may not have been formally agreed, in which case keep evidence of a contemporaneous valuation.
• The probate valuation date is the date of death.
• If the property is sold within four years for materially more than the probate value, HMRC may revisit the probate valuation and reopen the IHT account.
• Improvements you make after inheritance are added to the probate base cost.

Always retain the probate valuation document permanently. It becomes the base cost for the next disposal, which may be 30+ years away.

Spouse transfer planning in depth

Section 58 of the Taxation of Chargeable Gains Act 1992 treats transfers between spouses or civil partners as 'no gain, no loss'. The receiving spouse takes on the original base cost, and any eventual sale to a third party is calculated against that original base cost. This planning rule is one of the most powerful CGT-mitigation tools available to UK property owners.

When does a spouse transfer help?

• When one spouse is a non-taxpayer and the other is higher-rate. Transferring 50% before sale brings half the gain into the lower band (18%) and unlocks an additional £3,000 AEA.
• When one spouse already has substantial gains in the tax year (e.g. a business sale) and the AEA is used. Transferring to the spouse with no other gains preserves the AEA.
• When one spouse has carried-forward CGT losses that would otherwise expire unused.
• When both spouses are higher-rate but the AEA is still worth £720 of saved tax each (£3,000 × 24%) — using both AEAs saves £1,440.

When does it NOT help?

• If both spouses are higher-rate and you have already maximised the £6,000 combined AEA — band splits do not help further.
• If the property has a mortgage and the lender requires both spouses to be added — risks SDLT becoming payable if the transferred share of mortgage exceeds the SDLT threshold (currently £125,000 for second properties, with the 3% surcharge applying on the entire price).
• If divorce or separation is in progress — special rules apply during the year of separation; transfers after the tax year of separation revert to market value.

Mechanics of a 50/50 transfer

1. Decide on the share percentage (typically 50/50 or 99/1 depending on the planning goal).
2. Draft a Declaration of Trust setting out beneficial ownership; signed by both spouses and witnessed.
3. File Land Registry form TR1 (transfer of whole) or AP1 (registration of beneficial interest) — small fee.
4. Notify the mortgage lender; obtain consent to the transfer.
5. Complete before exchange of contracts on the eventual sale — HMRC has challenged 'transfers' that occurred after exchange because they were ineffective.
6. Submit Form 17 to HMRC if you want rental income split unequally from the same date.

Buy-to-let losses and how to use them

Capital losses on UK residential property arise when the sale proceeds (net of disposal costs) are less than the base cost plus improvements. Common causes include cladding-affected flats sold below purchase price, properties bought near the 2007 peak that did not recover, and forced sales at auction.

Loss treatment rules:

• Losses must be notified to HMRC within four years of the end of the tax year of the loss, otherwise they are lost permanently.
• Losses offset against other chargeable gains in the same tax year first.
• Unrelieved losses carry forward indefinitely to future tax years.
• Losses cannot be carried back to earlier years.
• Losses on connected-party transactions (spouse, parent, child, sibling) are 'clogged' — usable only against future gains involving the same connected party.
• Carried-forward losses are applied before the AEA — meaning you cannot waste the AEA in years with losses.

Example: in 2025/26 Sarah sold a buy-to-let at a £40,000 loss. She has no other gains that year. In 2026/27 she sells another property realising a £55,000 gain. The 2025/26 loss reduces the 2026/27 gain to £15,000, which is further reduced by the £3,000 AEA to a taxable gain of £12,000. CGT at 24% is £2,880 instead of the £12,480 she would have paid without the carried-forward loss.

Should I incorporate my buy-to-let?

Incorporation of a buy-to-let portfolio (transferring properties from personal ownership to a limited company) became popular after the 2017 introduction of the Section 24 finance-cost restriction, which removed mortgage interest as a deduction from rental profits for individual landlords. However, the CGT and SDLT consequences of incorporation are significant.

The triggers and reliefs

Transferring property to your own limited company is treated as a sale at market value for CGT (you have a chargeable gain even though you control both sides) and as a purchase by the company for SDLT (the company pays SDLT at the higher residential rate including the 3% surcharge). Two reliefs may apply:

• Section 162 TCGA 1992 incorporation relief: defers the CGT if the entire property portfolio is a 'business' rather than an investment. The HMRC interpretation of 'business' requires substantial personal time commitment (typically 20+ hours weekly, evidenced by property management activities, marketing, dealing with tenants), not merely holding tenanted property.
• Section 165 TCGA 1992 gift relief: may defer the CGT on gifts to a company in limited circumstances, but the company must elect with the donor.

Section 24 finance-cost restriction (since 2020)

Individual landlords cannot deduct mortgage interest from rental income for tax purposes. Instead, they receive a 20% basic-rate tax credit. A higher-rate landlord with £20,000 of mortgage interest gets only £4,000 of relief instead of the £8,000 they would have received pre-2017. Companies are unaffected — they fully deduct mortgage interest as a business expense.

When does incorporation make sense?

• Highly geared portfolios where Section 24 disallowance is large and reduces effective return below 0%.
• Larger portfolios (15+ properties) where the business test for incorporation relief is likely to be met.
• Long-term hold strategies where retained profits inside the company can be reinvested at 19%-25% corporation tax instead of 40-45% income tax.

Always consult a chartered tax adviser or chartered accountant before incorporating; HMRC has challenged several incorporation strategies and the costs of getting it wrong are substantial.

Frequently asked questions

What is the buy-to-let CGT rate in 2026/27?

18% for any gain within the basic-rate band (income up to £50,270) and 24% for any gain above. These rates have applied since 6 April 2024 following the Spring Budget 2024 reduction from 28% to 24%. The annual exempt amount is £3,000 per individual (£1,500 for trusts). Companies pay corporation tax on chargeable gains at 19%-25%.

How is buy-to-let CGT calculated step by step?

Disposal proceeds minus base cost (purchase price plus acquisition SDLT, legal, valuation) minus capital improvements minus £3,000 AEA equals taxable gain. Apply 18% to the portion of gain within the basic-rate band remaining, and 24% to the portion above. The HMRC CG Manual section CG14250 documents the methodology.

What is the 60-day CGT reporting rule?

Since 27 October 2021, individuals disposing of UK residential property must report and pay CGT within 60 days of completion via HMRC's UK Property Capital Gains Tax Service. Late penalty is £100 immediately, with daily £10 penalties from day 90 and 5% of tax at 6 and 12 months. Late payments accrue interest at the HMRC late-payment rate.

Has private residence relief been abolished?

No — Principal Private Residence (PPR) relief still applies in full to your main home throughout 2026/27. What was abolished in 2024 was Multiple Dwellings Relief on SDLT for buy-to-let portfolio purchases. PPR remains the most generous CGT relief available, eliminating tax on the sale of your only or main home.

Can I transfer a buy-to-let to my spouse to reduce CGT?

Yes. Transfers between spouses or civil partners are 'no gain, no loss' under section 58 TCGA 1992. The receiving spouse takes the original base cost. Used to use both £3,000 AEAs and push gain into the basic-rate band of the lower-earning spouse. Must be a genuine legal transfer (Declaration of Trust or Land Registry transfer) completed before exchange.

Are estate agent and legal fees deductible?

Yes. Estate agent commission, conveyancing legal fees on sale, valuation, EPC and advertising costs are deductible from disposal proceeds. Original SDLT, acquisition legal fees, survey and search fees are deductible as acquisition costs. Mortgage arrangement fees and interest are not deductible from CGT (interest is relieved against rental income under Section 24 restrictions).

What capital improvements can I deduct?

Improvements (not repairs) reflected in the property at the time of sale. Allowable: extensions, loft conversions, new kitchens with layout changes, central heating newly installed, double glazing newly installed, conservatories, garages. Not allowable: redecoration, like-for-like boiler replacement, routine maintenance, sale-readiness cosmetic work. HMRC CG15180 sets out the rules.

How do I report a buy-to-let sale to HMRC?

Use the HMRC UK Property Capital Gains Tax Service at gov.uk/guidance/report-and-pay-capital-gains-tax-on-uk-property. You need a Government Gateway ID, property address, completion date, sale price, original purchase price, improvement costs and estimated income for the year. Submit within 60 days of completion. Include the gain on your self-assessment return at year-end.

What changed in the 2024 Spring Budget?

Higher-rate residential CGT reduced from 28% to 24% (basic rate unchanged at 18%); AEA confirmed at £3,000 (already reduced from £6,000 in 2023/24); Multiple Dwellings Relief on SDLT abolished from 1 June 2024; and Furnished Holiday Lettings regime abolished from 6 April 2025. Confirmed in Finance (No. 2) Act 2024.

How do I split the gain between 18% and 24%?

Add your taxable income (after personal allowance) to the taxable gain. The portion within the basic-rate band (income up to £50,270) is taxed at 18%; the portion above is taxed at 24%. Example: £40,000 income plus £30,000 gain. Basic-rate band remaining = £10,270. £10,270 at 18% = £1,849, £19,730 at 24% = £4,735. Total £6,584.

Are buy-to-let losses offset against gains?

Yes. Capital losses offset gains in the same year first, then carry forward indefinitely. Losses must be notified to HMRC within four years of the end of the tax year of the loss. Losses on connected-party transactions are 'clogged' — usable only against future gains involving the same person. Carry-forward losses apply before the AEA.

What if I sell to my own limited company?

The transfer is at market value: you pay CGT on the gain (18%/24%), the company pays SDLT at the residential rates including the 3% surcharge, and the company uses the market-value price as its future base cost. Section 162 incorporation relief may defer the CGT if the portfolio is a 'business' (substantial personal time commitment). Specialist advice essential.

How long do I keep records?

Six years after the tax year of disposal. For long-held property, keep purchase documents (completion statement, SDLT receipt, conveyancing receipts), every improvement invoice, valuation reports, and probate documents for inherited property. Digital scans are acceptable provided they are legible.

Glossary of buy-to-let CGT terminology

• AEA: Annual Exempt Amount, currently £3,000 per individual in 2026/27.
• Base cost: The price paid for the property plus acquisition costs, against which the gain is measured.
• Basic-rate band: Taxable income between £12,571 and £50,270, where CGT applies at 18%.
• BTL: Buy-to-let.
• CGT: Capital Gains Tax.
• Chargeable gain: The taxable gain after deducting allowable costs but before applying the AEA.
• Clogged loss: A loss on a connected-party transaction usable only against future gains with the same person.
• Connected party: Spouse, civil partner, parent, child, sibling, business partner — defined in s.286 TCGA 1992.
• Disposal: Sale, gift, or other transfer of ownership of an asset.
• Higher-rate band: Taxable income above £50,270, where CGT applies at 24%.
• Incorporation: Transfer of personally-owned property to a limited company.
• MDR: Multiple Dwellings Relief on SDLT — abolished 1 June 2024.
• PPR: Principal Private Residence relief, exempting your main home from CGT.
• RPI: Retail Price Index, historically used for indexation allowance (now frozen for companies, never applied to individuals post-1998).
• Section 24: Finance restriction on individual landlords' mortgage interest relief, fully in force since 2020.
• Section 58 TCGA 1992: The provision allowing 'no gain, no loss' spouse transfers.
• Section 162 TCGA 1992: Incorporation relief, deferring CGT on transferring a 'business' to a company.
• Self-assessment: The annual tax return process, with deadlines 31 October (paper) or 31 January (online).
• SDLT: Stamp Duty Land Tax, payable on UK property purchases.
• TCGA 1992: Taxation of Chargeable Gains Act 1992, the principal CGT statute.

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About this calculator

Last updated 25 May 2026 by Mustafa Bilgic, independent operator of UK Calculator (Adıyaman, Turkey — see About). Rates and thresholds cross-checked against the GOV.UK Capital Gains Tax rates and allowances page, the HMRC Capital Gains Manual sections CG14250 and CG15180, and Finance (No. 2) Act 2024 schedule 12. The calculator applies the 2026/27 rates of 18%/24%, the £3,000 annual exempt amount, and splits the gain between bands using the frozen £50,270 basic-rate threshold. This is general information only and does not constitute regulated tax advice. Always consult a qualified chartered tax adviser or accountant before relying on any CGT calculation in a real disposal.