How Do I Report Capital Gains Tax to HMRC

Introduction

Capital Gains Tax is a tax on the profit you make when you sell or dispose of an asset that has increased in value. You only pay tax on the gain, not on the total sale price. HMRC requires individuals and trustees to report and pay CGT within specific deadlines, depending on the type of asset sold.

The reporting process is straightforward once you understand which system applies to your situation.

When you need to report Capital Gains Tax

You must report and pay Capital Gains Tax if you sell or dispose of an asset that is not exempt and your gain exceeds:

The annual CGT allowance, which is £3,000 for the 2024 25 tax year.

Or if the total amount you sold assets for (before deducting costs) exceeds four times the allowance, even if the gain is below the limit.

You may also need to report if:

You sell a property that is not your main home.

You sell shares or investments outside an ISA or pension.

You gift an asset to someone other than your spouse or civil partner.

You dispose of personal possessions worth more than £6,000, such as art or jewellery.

If the sale results in a loss, you can report it to HMRC so that it can be carried forward to offset future gains.

How to report CGT on property sales

For UK residential property, the rules are stricter than for other assets. Since 2020, you must report and pay any Capital Gains Tax within 60 days of the completion date.

You report this using HMRC’s Capital Gains Tax on UK property account, which is a separate online service.

Steps to report a property gain

Create or sign in to your Government Gateway account at GOV.UK.

Open a Capital Gains Tax on UK property account.
You will need details such as the completion date, purchase and sale prices, and any allowable costs (for example, estate agent or solicitor fees).

Calculate your gain.
HMRC’s online system will help you work out the amount of tax due based on your taxable income and any reliefs.

Submit your return and pay the tax.
Payment is made online through your property account, usually by bank transfer or debit card.

If you own the property jointly, each owner must create their own account and report their share of the gain separately.

How to report CGT on other assets

If you sell shares, investments, or non-property assets, you report the gain through your Self Assessment tax return.

If you already file a Self Assessment return:

Complete the Capital Gains Summary pages (SA108).

Include details of each disposal, the dates, amounts, and allowable costs.

File your return by 31 January following the end of the tax year.

If you do not normally complete a Self Assessment return but need to report a gain, contact HMRC to request one or to register for Self Assessment.

Alternatively, you can use HMRC’s real-time Capital Gains Tax service, available through your Personal Tax Account, to report gains on certain assets as they occur.

What information you will need

To complete your CGT report, you will need:

The date you bought and sold the asset.

The purchase and sale prices.

Costs of buying, selling, or improving the asset (for example, legal fees, stamp duty, or estate agent fees).

Details of any reliefs or exemptions claimed, such as Private Residence Relief.

Records of any capital losses to offset against gains.

Your income for the tax year, as it affects the rate of CGT you pay.

Keeping detailed records ensures accuracy and helps avoid HMRC queries later.

Deadlines for reporting and paying CGT

UK residential property: Report and pay within 60 days of completion.

Other assets: Report and pay through your Self Assessment by 31 January following the end of the tax year.

If you fail to meet these deadlines, HMRC may charge interest and late filing penalties.

For example, if you sell a second home in June 2024, you must report and pay by August 2024. If you sell shares in December 2024, you must report them by 31 January 2026 via your 2024 25 Self Assessment return.

How much CGT you will pay

The rate of Capital Gains Tax depends on your income level and the type of asset sold.

Basic rate taxpayers: 10 percent on most gains, 18 percent on residential property.

Higher and additional rate taxpayers: 20 percent on most gains, 24 percent on residential property.

Your total taxable income and gains are combined to determine which rate applies. You may also qualify for reliefs such as:

Private Residence Relief for your main home.

Business Asset Disposal Relief for certain business sales (10 percent rate).

Rollover Relief or Gift Holdover Relief in specific situations.

How to correct mistakes

If you discover an error after submitting your CGT report, you can amend it:

For property reports, log back into your Capital Gains Tax on UK property account to make changes.

For Self Assessment, you can amend your return within 12 months of the filing deadline.

If the correction results in a refund, HMRC will issue it directly to your bank account once the revised calculation is processed.

Paying the tax

You can pay Capital Gains Tax to HMRC using:

Online or telephone banking.

Debit card via the HMRC online service.

Cheque by post (though online payment is faster).

Always use your payment reference number, found on your CGT return or Self Assessment statement, to ensure the payment is allocated correctly.

Common mistakes to avoid

Missing the 60-day deadline for UK residential property.

Forgetting to include selling costs such as estate agent and solicitor fees.

Failing to offset capital losses from the same or earlier years.

Miscalculating your tax rate by excluding other income.

Assuming the entire sale price is taxable instead of just the gain.

Double-checking your figures and keeping accurate records can save you time, money, and penalties.

Example scenario

Emma sells a second home for £350,000 that she originally bought for £200,000. She spends £10,000 on improvements and pays £5,000 in estate agent and solicitor fees.

Her gain is:
£350,000 £200,000 £10,000 £5,000 = £135,000.

After applying her £3,000 annual allowance, her taxable gain is £132,000. As a higher rate taxpayer, she pays 24 percent on the gain:
£132,000 × 24 percent = £31,680.

Emma must report and pay this within 60 days of completion.

Conclusion

Reporting Capital Gains Tax to HMRC is straightforward once you know which system applies to your situation. Property gains must be reported within 60 days, while other assets are reported through your annual Self Assessment.

By keeping accurate records, claiming allowable expenses, and meeting deadlines, you can ensure your CGT is calculated correctly. If your situation is complex, such as multiple assets or partial property relief, an accountant or tax adviser can help you stay compliant and minimise your liability.