Selling a second property? Changes to Capital Gain Tax might impact you


Capital Gains Tax (CGT) has been in the spotlight recently due to changes in the tax-free allowances as well as updates to the rates of taxation of certain assets. Over the last couple of tax years, these changes have been drip-fed to individuals however, looking at where these allowances were two years ago, the changes are quite dramatic.

In the 2022/2023 tax year, the Capital Gains tax-free exemption was roughly in line with the tax-free personal allowance at £12,300. However, a year later, in 2023/2024, this allowance was more than halved to £6,000. In the current 2024/2025 tax year, this has been halved again to just £3,000 - a reduction of more than £9,000 in two years.

How does this impact your tax liability?

For a higher rate or additional rate taxpayer, the current tax rates for the disposal of assets are 24% on gains from residential property, and 20% on gains from other chargeable assets.

HMRC reduced the tax rate on residential property from 28% to 24% on 6 April 2024  and, although this isn’t a huge reduction, it does give some reprieve to the reduction in tax-free exemption, particularly where the gain is significant and may result in a lower tax charge than in 2022/2023 - when the threshold was higher – as the example below shows.

As there has been no change to the tax rate for other chargeable assets, the amount of CGT payable will increase in the 2024/2025 tax year.

Selling residential property

A higher or additional rate individual who sold a residential property, which was not their home, for a gain of £100,000 in 2022/2023, would have paid £1,276 more tax compared to someone disposing of residential property in 2024/2025, because of the falling tax rate

Tax year ended 5 April 2023


Tax year ended 5 April 2025






Less: Annual Exemption


Less: Annual Exemption


Net Gain


Net Gain


Taxed at 28%


Taxed at 24%



Increased reporting requirements

However, whilst there is a slight tax saving based on the above example, HMRC does have more stringent reporting requirements for the sale of residential properties with their 60-day reporting regime. For anyone disposing of a residential property the reduction in annual exemption to £3,000 will undoubtedly mean that more individuals are caught in the 60-day regime and will need to file and pay any tax due to HMRC within 60 days of sale completion. If an individual does not normally complete a self-assessment tax return, then any residential gains reported through the 60-day reporting regime will not trigger the need to register for self-assessment. On the other hand, for an individual disposing of other assets, there may be a requirement to report the gain via a self-assessment tax return.   

If you are unsure as to whether your disposal will mean you have an obligation to complete a 60-day CGT report, or if it should be included on a self-assessment tax return, it is advisable to discuss your circumstances with a qualified accountant to ensure that there are no undisclosed gains to HMRC; this could result in penalties being issued.

Finally, as with all disposals of chargeable assets, there are potentially a number of tax saving reliefs (Business Asset Disposal Relief (BADR), Principle Private Residence Relief, etc) that can be applied depending on the asset and/or your individual circumstances. For example,  currently, if a property qualifies as a furnished holiday let (FHL), you could claim CGT BADR on the sale which would reduce the rate of CGT from 24% to 10%.  However, on 6 April 2025 FHLs are due to be abolished which will increase the CGT on any sales after this date.

As always, it is best to check with a trusted accountant whether these are available to be claimed.  


For advice and support around the changes to Capital Gains Tax and how they might impact your tax liability please get in touch. Call 0808 1445575 or email

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