If you’re a basic rate tax payer, Capital Gains Tax (CGT) on buy-to-let second properties is charged at 18%, and if you’re a higher or additional rate tax payer it’s charged at 28%. With other assets, the basic-rate of CGT is 10%, and the higher rate is 20%.
If you sell your buy-to-let property for profit, you’ll usually pay CGT if your gain is higher than the annual threshold of £6,000 (for the 2023/24 tax year). Couples who jointly own assets can combine this allowance, potentially allowing a gain of £12,000 (2023/24) to be made in the current tax year.
You can reduce your CGT bill by offsetting costs like Stamp Duty, solicitor and estate agent fees or losses made on a sale of a buy-to-let property in a previous tax year by deducting these from any capital gain.
Any gain from the sale of your property should be declared to HMRC and any tax due paid within 30 days. The resulting capital gain is included with your income and taxed at whatever marginal rate (18% and/or 28%) you would then pay. It’s not possible to carry any CGT annual allowance forward or back, so it must be used in the current tax year.