The 60 day capital gains tax deadline

Where the deadline came from

Until April 2020 capital gains tax on property was simply reported on the annual tax return and paid the following 31 January. Depending on when you sold, that could be up to 22 months after completion.

The government decided that was too long to wait, so from 6 April 2020 a 30 day reporting and payment requirement was introduced. Thirty days proved unworkable in practice, and it was extended to 60 days for completions on or after 27 October 2021. Sixty days is where it has stayed.

The change was poorly publicised and many people still do not know it exists. Conveyancers do not generally handle it, accountants only find out about a sale when the client mentions it, and the clock starts running from completion whether or not anybody has told you.

Sixty days from completion, not exchange

The clock starts on the completion date, which is when the sale actually goes through and the money changes hands, not the date contracts were exchanged.

A property completing on 10 May 2026 must be reported and the tax paid by 9 July 2026. Sixty days is roughly two months, and it falls in the middle of a period when you are usually dealing with everything else that goes with a property sale.

Both the return and the payment are due on the same date. There is no arrangement whereby you file now and pay later.

Who this applies to

For someone resident in the United Kingdom, the requirement applies to disposals of residential property in the United Kingdom where there is capital gains tax to pay. That covers a buy to let, a second home, a holiday home, an inherited property you never lived in, and a property you once lived in but which is no longer fully covered by relief.

It does not apply to commercial property, to shares, or to any other asset. Those are reported on the annual return in the ordinary way.

For someone not resident in the United Kingdom the rules are wider and stricter. Non residents must report every disposal of United Kingdom land and property within 60 days, residential or commercial, and even where no tax at all is due. Indirect disposals, such as selling shares in a property rich company, are also caught.

When no return is needed

If the gain is fully covered so that no tax arises, a United Kingdom resident does not need to file within 60 days. The most common situations are these.

The property was your only or main residence throughout ownership, so private residence relief removes the whole gain. You sold at a loss. The gain is within your annual exempt amount, which is £3,000. You have brought forward losses that reduce the gain to nil or below the exemption. The property was transferred to a spouse or civil partner, which is treated as no gain and no loss.

The important word is fully. If relief covers most of the gain but leaves a taxable slice, the return is required. Somebody who lived in a property for eight years and then let it out for four will have a chargeable portion, and the 60 day obligation applies.

Working out the tax in 60 days

The awkward part is that you must estimate your income for a tax year that has not finished, because the rate depends on which band the gain falls into.

Capital gains tax on residential property is charged at 18% within your basic rate band and 24% above it. To know how much falls into each you need to know your income for the whole year, which in May you do not.

You are permitted to make a reasonable estimate based on what you expect to earn. If it turns out to be wrong, the position is corrected on the Self Assessment return at the end of the year, with either a further payment or a refund.

Take Elena, who sells a rental flat in June 2026 for £280,000, having bought it for £190,000. Her costs of buying and selling, including legal fees and stamp duty on the original purchase, come to £12,000. The gain is £78,000. After the £3,000 annual exempt amount, £75,000 is taxable. She expects to earn £42,000 in employment income, leaving roughly £8,270 of basic rate band unused. So £8,270 is taxed at 18% giving £1,489, and the remaining £66,730 at 24% giving £16,015. Her 60 day payment is about £17,504.

It has to be reported twice

This is the part almost everybody gets wrong. Filing the 60 day return does not remove the gain from your Self Assessment return.

If you are within Self Assessment, the same disposal must be reported again on your annual return, with the tax already paid shown as a credit. The final calculation is then done properly with actual figures rather than estimates.

Forgetting the second report is common and creates a mismatch that invites HMRC enquiry. Reporting the gain twice without claiming the credit is also common and results in paying the tax twice, which then needs unpicking.

The penalties

A late 60 day return attracts an immediate £100 penalty. If it is more than 6 months late, a further penalty of £300 or 5% of the tax due applies, whichever is greater. At 12 months the same charge applies again.

Late payment of the tax carries separate penalties of 5% at 30 days, 6 months and 12 months, with interest running throughout.

When the rules first came in HMRC ran a short period of leniency for those who filed late but paid on time. That ended years ago, and penalties are now applied routinely.

Reliefs worth checking before you sell

Private residence relief removes the gain for any period the property was genuinely your main home, plus the final 9 months of ownership whether you lived there or not. For a property that was once your home and later let out, that can remove a substantial part of the gain.

Lettings relief still exists but only where you shared occupation with the tenant, which is rare. Most landlords who assume they qualify no longer do, following the changes in April 2020.

Where a property is owned jointly, each owner has their own annual exempt amount and their own 60 day obligation. A couple selling a jointly owned rental have £6,000 of exemption between them and must file two separate returns, not one.

Transferring a share to a spouse before sale is a well established way of using both sets of allowances and both basic rate bands. It has to be done before the sale is legally committed, so it is a planning point rather than a fix afterwards.

What to do the moment you decide to sell

Work out the likely gain before you accept an offer, not after completion. Gather the original purchase completion statement, the stamp duty paid, the legal fees on both ends, the estate agent's commission, and receipts for any capital improvements such as an extension or a new kitchen where it was an improvement rather than a repair.

Those improvement receipts are the ones people cannot find years later, and every missing one costs 24% of its value in extra tax. If you own property you intend to sell one day, keeping a single folder of purchase and improvement paperwork is the cheapest tax planning there is.

Set up your HMRC Capital Gains Tax on UK Property account in advance. It is separate from your ordinary Government Gateway account and takes time to set up, and doing that on day 55 of 60 is not comfortable.

Inherited property

Inheriting a property does not trigger capital gains tax. The estate may pay inheritance tax, but that is a different charge on a different person. What matters for you is the value at the date of death, because that becomes your base cost.

If you later sell, the gain is measured from that probate value rather than from what the deceased originally paid. So a house valued at £300,000 on death and sold two years later for £320,000 produces a gain of £20,000 less costs, not the £250,000 gain it might have shown against a purchase price from the 1980s.

Getting a proper valuation at the date of death is therefore worth real money later, and an informal estate agent estimate is weaker evidence than a formal valuation if HMRC ever queries it. Where the sale happens within a few years and there has been no significant movement in the market, the gain is often small enough that no 60 day return is needed at all.

Properties that were once your home

This is the most common situation where people wrongly assume no return is needed. Private residence relief covers the period you actually lived in the property as your main home, plus the final 9 months of ownership regardless of occupation. It does not cover the years in between when it was let.

Say you bought a flat in 2014, lived in it until 2020, then let it out until selling in 2026. You owned it for 12 years, lived in it for 6, and get the final 9 months on top. So roughly 6 years and 9 months out of 12 is relieved, and the remaining share of the gain is taxable. On a £120,000 gain that leaves about £52,500 chargeable, which after the annual exempt amount is very much a 60 day return.

Paying when the money is tied up

Normally a property sale generates the cash to pay the tax, so the 60 day deadline is inconvenient rather than impossible. The problem cases are gifts and transfers at undervalue, where the tax is calculated on market value but no money has changed hands.

Gifting a rental property to an adult child is a disposal at market value for capital gains purposes. A £90,000 gain creates a tax bill of over £20,000 within 60 days, with nothing received to pay it from. Holdover relief is not generally available on residential property gifts of this kind, so the charge is real. Anybody considering a gift of property should work out the tax before signing anything, not afterwards.

Frequently asked questions