When Is Capital Gains Tax Due After Selling an Asset

Understanding when Capital Gains Tax applies

CGT is charged on the gain, not the total sale price, when you dispose of an asset. Disposal means selling it, giving it away, exchanging it, or receiving compensation for it (such as an insurance payout).

For most assets, you only pay CGT if your total gains for the year exceed the annual exemption, which is £3,000 for the 2025 26 tax year.

Once you know your taxable gain, you must report it to HMRC and pay the tax within the correct time limit, which varies depending on what you sold.

When CGT is due for residential property sales

If you sell a residential property that is not your main home, such as a buy-to-let or a second property, you must report and pay CGT within 60 days of the completion date.

The 60-day rule applies to:

UK residents selling UK residential property

Non-UK residents selling any UK property (residential or commercial)

Example

You sell a buy-to-let flat and the sale completes on 15 June 2025. You must report the sale and pay any CGT owed by 14 August 2025.

If you fail to do this within the 60-day period, HMRC can charge late filing penalties and interest on the unpaid tax.

This reporting is done separately through HMRC’s Capital Gains Tax on UK Property service, not via your annual Self Assessment. However, you will still need to include the gain on your tax return if you complete one.

When CGT is due for shares, investments, and other assets

For assets such as:

Shares and funds held outside ISAs or pensions

Business assets

Personal possessions like antiques or art worth more than £6,000

You do not need to report the gain immediately. Instead, you include it on your Self Assessment tax return for that tax year.

The payment deadline is 31 January following the end of the tax year in which you made the gain.

Example

You sell shares in September 2024 and make a taxable gain. This falls in the 2024 25 tax year (which ends 5 April 2025). You must report the gain and pay the CGT by 31 January 2026.

If you do not normally complete a Self Assessment, you can inform HMRC using the “real time” Capital Gains Tax reporting service, which allows you to declare and pay your tax earlier if you wish.

Special cases for business assets

If you sell business assets, such as a property, machinery, or shares in your own company, the same deadlines generally apply — 31 January after the end of the tax year.

However, if you qualify for Business Asset Disposal Relief (BADR) or another relief such as Rollover Relief, you can claim these at the same time as reporting the disposal.

Claims for reliefs must be made within the same deadlines as your CGT reporting, otherwise you may lose entitlement to them.

How to report and pay

The process depends on what you sold.

For residential property sales:

Report and pay using HMRC’s online CGT property account within 60 days of completion.

You can use this even if you plan to file a Self Assessment later.

For other assets:

Report through your Self Assessment by 31 January after the end of the tax year.

If you are not in Self Assessment, use HMRC’s real-time CGT service.

When paying, you can use bank transfer, debit card, or HMRC’s online payment system. Always allow a few days for processing, especially if payment falls near the deadline.

What happens if you miss the deadline

If you fail to report or pay on time, HMRC can apply penalties and interest.

Late filing penalty: £100 immediately after the deadline.

Three months late: An additional £10 per day (up to £900).

Six months late: A further £300 or 5% of the tax due (whichever is higher).

Twelve months late: Another £300 or 5% of the tax due.

Interest is also charged from the day after the payment deadline until the balance is cleared.

Prompt reporting avoids unnecessary costs and keeps your tax record in good standing.

Reducing your Capital Gains Tax before it’s due

Before selling an asset, it’s worth planning ahead to minimise your CGT liability. Legal and effective strategies include:

Using your £3,000 annual exemption to make smaller disposals tax-free.

Offsetting losses from other investments in the same or previous years.

Transferring assets between spouses to use both partners’ allowances.

Spreading disposals over different tax years to stay within lower tax bands.

Claiming applicable reliefs such as Business Asset Disposal Relief.

These steps can substantially reduce your bill, but they must be arranged before the sale completes. Once a transaction has taken place, your tax liability is fixed.

Keeping records for HMRC

To support your CGT calculations, you must keep accurate records for each asset you sell, including:

Purchase and sale dates

Amounts paid and received

Associated costs such as legal, valuation, or estate agent fees

Details of any improvements that increased the property’s value

Records should be kept for at least five years after the 31 January filing deadline. If you carry forward losses, keep the records until they are used.

Final thoughts

When you sell an asset that has increased in value, the timing of your Capital Gains Tax payment depends on the type of asset. For residential property, the 60-day rule applies, while for shares, business assets, and other investments, payment is due by the following 31 January.

Understanding these deadlines is crucial to avoid penalties and ensure compliance with HMRC rules. With careful planning and timely reporting, you can meet your tax obligations smoothly and even reduce how much you owe.