Tag: capital gains tax

Capital Gains Tax (CGT) rules have changed significantly over the last few years, leaving many homeowners and property investors wondering whether they still qualify for exemptions and reliefs.

The good news is that Private Residence Relief (PRR) remains the main exemption for homeowners. However, changes to Capital Gains Tax rates, annual allowances, and reliefs mean it’s more important than ever to understand the current rules in force before selling a property.

In this guide, we’ll explain the new Capital Gains Tax rules in force as of right now, who qualifies for exemptions, and what you can do to reduce your Capital Gains Tax liability.

Jump to Section:

• What Are the New Capital Gains Tax Rules?
• What Makes You Exempt From Paying Capital Gains Tax?
• What Are the Current Capital Gains Tax Rates?
• What Is the Current Capital Gains Tax Exemption Amount?
• How Can You Reduce Your Capital Gains Tax?
• Book a Capital Gains Tax Valuation
• New Capital Gains Tax Rule FAQs

What Are the New Capital Gains Tax Rules?

Several important Capital Gains Tax changes have been introduced in recent years.

Rule	Current Position (2026/27 Tax Year)
Annual Capital Gains Tax Allowance	£3,000 for individuals
Residential Property CGT Rates	18% (basic rate) and 24% (higher rate)
Business Asset Disposal Relief Rate	18%
Final Period Exemption	9 months
Private Residence Relief	Still available where qualifying conditions are met

These changes have reduced the amount many taxpayers can realise tax-free and increased the tax payable on certain disposals.

What Makes You Exempt From Paying Capital Gains Tax?

The most common exemption is Private Residence Relief (PRR).

You will usually qualify if:

• The property has been your only or main residence throughout your ownership
• You have not used part of the property exclusively for business purposes
• The total grounds are normally no larger than the permitted area
• The property was not purchased primarily to make a profit through resale

If you qualify for full Private Residence Relief, you will usually pay no Capital Gains Tax when selling your home.

What Are the Current Capital Gains Tax Rates?

From the 6th April 2026, the main Capital Gains Tax rates are:

Taxpayer	Capital Gains Tax Rate
Basic Rate Taxpayer	18%*
Higher or Additional Rate Taxpayer	24%

*Basic-rate taxpayers may pay a combination of rates depending on their taxable income and the size of their gain.

What Is the Current Capital Gains Tax Exemption Amount?

Every individual currently has an Annual Exempt Amount of £3,000.

This means that only gains above this threshold (after deducting allowable losses and reliefs) are potentially taxable. The allowance has been significantly reduced from previous years, making professional tax planning increasingly more important.

How Can You Reduce Your Capital Gains Tax?

Depending on your circumstances, you may be able to reduce your Capital Gains Tax liability by:

• Claiming Private Residence Relief
• Using your Annual Exempt Amount
• Offsetting capital losses
• Claiming allowable buying and selling costs
• Claiming qualifying improvement costs
• Obtaining a professional Capital Gains Tax valuation where appropriate

An accurate valuation is particularly important when calculating gains on property, as HMRC may require evidence to support your figures.

Find out more about reducing your Capital Gains Tax in our guide: How Long Do I Have to Live In a Property to Avoid Capital Gains Tax?

Book Your Capital Gains Tax Valuation Today

At Crest Surveyors, we provide independent RICS-certified Capital Gains Tax valuations that are designed to support your tax position with accurate, defensible market evidence.

Whether you’re selling a former home, investment property, or mixed-use asset, our valuations help ensure your figures are fully supported and HMRC-compliant.

Speak to our team to book a professional Capital Gains Tax Valuation today.

New Capital Gains Tax Rule FAQs

Can I Still Claim the 9-Month Capital Gains Tax Exemption?

Yes. The final 9 months of ownership still qualify for Private Residence Relief if the property has been your main residence at some point during ownership.

This rule replaced the older 18-month and 36-month extensions and is now the standard final exemption period for most homeowners.

Read our guide: What Is the Capital Gains Tax 9 Month Rule?

What Was the 36 Month Capital Gains Tax Rule?

The 36-month rule was a former Private Residence Relief extension that allowed a longer tax-free period after moving out of a home.

It has now been reduced and replaced by the 9-month final exemption period in most cases. However, it is still widely referenced online, which can cause confusion for homeowners reviewing older guidance.

Read our blog, What Was the 36 Month Rule for Capital Gains Tax? for more information.

Is There a 6-Year Capital Gains Tax Rule In the UK?

There is no general “6-year rule” in UK Capital Gains Tax law for residential property. Confusion often arises from specific relief scenarios and historical interpretations. However, the UK system does not provide a blanket 6-year exemption.

Who Qualifies For 0% Capital Gains Tax?

You may pay 0% Capital Gains Tax if your gain is fully covered by Private Residence Relief, falls within your £3,000 Annual Exempt Amount, or is reduced to nil after deducting allowable losses and reliefs. Certain transfers, such as gifts to a spouse or civil partner, are also exempt from Capital Gains Tax.

What Is the 90% Rule For Capital Gains Exemption?

There is no general “90% rule” for Capital Gains Tax exemption in the UK. The term is sometimes used in relation to specific tax reliefs or specialist business tax rules, but it does not apply to the sale of residential property. Most homeowners should instead consider whether they qualify for Private Residence Relief and other HMRC-approved exemptions.

What Threshold Do You Have to Pay Capital Gains Tax?

For the 2026/27 tax year, you’ll generally only pay Capital Gains Tax if your taxable gains exceed the Annual Exempt Amount of £3,000 after deducting any allowable losses and reliefs. The amount of tax you pay will then depend on your income, the type of asset you’ve sold, and any reliefs you’re entitled to claim.

If you’re wondering how long you have to live in a property to avoid Capital Gains Tax, the short answer is that there is no minimum amount of time set by HMRC.

Instead, what matters is whether the property genuinely qualifies as your only or main residence. If it does, you may be eligible for Private Residence Relief (PRR) for the time you spent living at the property, which can reduce or even eliminate the Capital Gains Tax (CGT) due when you sell.

In this guide, we’ll explain how the rules work, what HMRC looks for, and the circumstances where you may still have to pay Capital Gains Tax.

Jump to Section:

• Is There a Minimum Time You Must Live in a Property to Avoid CGT?
• What Is Private Residence Relief?
• Example Scenarios
• How Can You Reduce or Avoid Capital Gains Tax?
• What Happened to the 36 Month Rule?
• Capital Gains Tax FAQs

Is There a Minimum Time You Must Live in a Property to Avoid CGT?

No. UK tax legislation does not specify that you must live in a property for six months, one year, two years, or any other fixed period before qualifying for Private Residence Relief.

Instead, HMRC considers whether the property was genuinely your main residence. Factors HMRC may consider include:

• Where you spent most of your time
• Where you were registered to vote
• Your correspondence address
• Where your family lived
• Utility bills and council tax records
• Whether your occupation of the property was intended to be permanent

Simply moving into a property for a short period before selling it does not automatically qualify you for relief if HMRC believes the occupation was temporary or purely to reduce tax.

What Is Private Residence Relief?

Private Residence Relief is the main Capital Gains Tax relief available when selling your home.

If the property has been your only or main residence throughout your ownership, you will usually have no Capital Gains Tax to pay. If you’ve lived there for only part of the ownership period, relief is normally calculated proportionately.

HMRC also allows the final 9 months of ownership to qualify for relief in most circumstances, even if you no longer live in the property.

You can learn more in our guide: What Is the Capital Gains Tax 9 Month Rule?

Example Scenarios

Scenario 1 – Main Residence Throughout

You buy a house and live there for 10 years.

In this case, you’ll usually pay no Capital Gains Tax, because the property qualifies for full Private Residence Relief.

Scenario 2 – Moving Out Before Selling

You live in a property for eight years before moving into a new home. You then rent out the original property for one year before selling.

The period that you occupied the property as your main residence may qualify for relief, along with the final nine months of ownership. The remaining rental period may be liable for Capital Gains Tax.

Scenario 3 – Buy to Let Property

You buy a property purely as an investment and rent it from day one.

Because it was never your main residence, Private Residence Relief is generally unavailable, meaning Capital Gains Tax may be payable when you sell.

How Can You Reduce or Avoid Capital Gains Tax?

Although you can’t always avoid CGT entirely, there are several legitimate ways to reduce the amount you pay.

These include:

• Claiming Private Residence Relief where eligible
• Using your Annual Exempt Amount
• Deducting allowable buying and selling costs
• Claiming the cost of qualifying improvements
• Using any available capital losses
• Obtaining an accurate professional valuation where required

Many homeowners overlook the importance of a professional valuation when calculating Capital Gains Tax.

At Crest Surveyors, we provide independent Capital Gains Tax Valuations prepared by experienced RICS surveyors.

“A professionally prepared valuation provides strong evidence to support your Capital Gains Tax calculation and can be invaluable if HMRC requests further information.”

Thomas Awoleye MSc Eng, MRICS, C.Build E MCABE

What Happened to the 36 Month Rule?

If you’ve researched this topic, you may also have come across the old 36 month rule.

Before April 2014, some homeowners could claim relief for the final 36 months of ownership. This was later reduced to 18 months and then to the current nine-month period.

Read our full guide: What Was the 36 Month Rule for Capital Gains Tax?

Capital Gains Tax FAQs

Do I Have to Pay Capital Gains Tax Immediately?

Capital Gains Tax on UK residential property normally needs to be reported and paid within the deadline set by HMRC after completion of the sale. Always check the current reporting deadlines, as these can change.

How Does HMRC Know if You Need to Pay Capital Gains Tax?

HMRC receives information from HM Land Registry, conveyancers and other sources. Taxpayers are also legally required to report taxable gains where applicable.

What is the 9-Month Rule?

The final nine months of owning a property usually qualify for Private Residence Relief, even if you were no longer living there before the sale.

Read our full guide: What is the Capital Gains Tax Nine Month Rule?

Do I Pay Tax if I Sell My House and Don’t Buy Another?

Buying another property does not determine whether you pay Capital Gains Tax. Instead, it depends on whether the property qualifies for Private Residence Relief and whether a taxable gain arises.

Do I Pay 18% or 28% Capital Gains Tax?

Capital Gains Tax rates depend on your taxable income and the tax rules in force at the time you sell. Higher-rate taxpayers generally pay a higher rate than basic-rate taxpayers. Check the latest HMRC guidance for current rates.

What Can You Offset Against Capital Gains Tax?

You can usually deduct purchase costs, legal fees, Stamp Duty Land Tax, estate agent fees, qualifying improvement costs, and allowable capital losses when calculating your Capital Gains Tax.

If you’ve been searching for the 6 year capital gains tax rule in the UK, you may be surprised to learn that there is no official 6 year rule in the UK.

The phrase is often confused with Australian tax law, where property owners can continue treating a former home as their main residence for Capital Gains Tax purposes for up to six years after moving out and renting it. The Australian Taxation Office provides detailed guidance on the 6-year rule.

However, the term can also be confused with certain HMRC 6-year rules, such as HMRC’s ability to investigate tax returns and assess underpaid tax going back up to six years in cases involving careless errors.

In the UK, different rules apply to Capital Gains Tax on residential property. Instead of a 6-year exemption, homeowners may qualify for Private Residence Relief (PRR) and benefit from the final 9-month exemption period.

This guide explains where the 6-year rule comes from, why it doesn’t apply in the UK, and which Capital Gains Tax rules you should know instead.

Jump To Section:

• Is There a 6 Year Capital Gains Tax Rule In the UK?
• What Is the Australian 6-Year Capital Gains Tax Rule?
• What Is the 6-Year Rule for HMRC?
• What Is the UK Equivalent of the 6-Year Rule For CGT?
• When Do You Need a Capital Gains Tax Valuation?
• Capital Gains Tax 6-Year Rule FAQs

Is There a 6 Year Capital Gains Tax Rule In the UK?

No. There is currently no 6-year capital gains tax rule in the UK.

The confusion usually arises because:

• Australian property owners can access a “6-year rule” under certain circumstances.
• Older UK CGT rules, such as the former 36-month rule, are sometimes mistaken for a 6-year rule.
• Some taxpayers confuse it with HMRC’s 6-year assessment and investigation time limits for certain tax matters.

What Is the Australian 6-Year Capital Gains Tax Rule?

In Australia, homeowners may be able to continue treating a former main residence as their primary residence for up to six years after moving out if the property is generating income, such as through renting. This is commonly referred to as the “6-year rule”.

How this works:

Scenario	Australian 6-Year Rule
Move out and rent the property	May remain CGT exempt for up to 6 years
Move back into the property	The 6-year period can potentially reset
Buy another main residence	Additional rules apply

Because this is an Australian tax provision, it has no direct equivalent in UK CGT legislation. For more information on the Australian 6-year rule, refer to the Australian Tax Office.

What Is the 6-Year Rule for HMRC?

When people refer to the 6-year rule in relation to HMRC, they are usually talking about HMRC’s time limits for investigating tax returns and issuing assessments where errors have occurred.

In many cases, HMRC can look back:

Circumstance	Typical HMRC Time Limit
Innocent error	Up to 4 years
Careless error	Up to 6 years
Deliberate behaviour	Up to 20 years

It is important to note that this HMRC 6-year rule relates to tax compliance and investigations. It is not a Capital Gains Tax relief and should not be confused with UK Private Residence Relief.

Find out more about the HMRC 6-year rule on the HMRC site.

What Is the UK Equivalent of the 6-Year Rule For CGT?

The closest equivalent that the UK has to the Australian 6-year rule is Private Residence Relief (PRR).

Private Residence Relief can reduce or eliminate Capital Gains Tax on a property that has been your only or main residence. When calculating relief, HMRC generally allows:

• The period you lived in the property as your main residence.
• The final 9 months of ownership, even if you were no longer living there.

For example:

Ownership Period	Treatment
Lived in the property for 8 years	Qualifies for PRR
Rented out for 2 years	May be partly taxable
Final 9 months before sale	Usually exempt under PRR

Unlike Australia’s 6-year rule, the UK does not automatically exempt a property simply because it was previously your main residence.

For more information on the current Capital Gains Tax 9-month rule in the UK, read our guide: What Is the Capital Gains Tax 9-Month Rule?

When Do You Need a Capital Gains Tax Valuation?

If Capital Gains Tax may be payable, obtaining an accurate valuation is essential.

A professional valuation may be required when:

• Selling a former main residence
• Disposing of an inherited property
• Transferring ownership between family members
• Calculating Capital Gains Tax liabilities
• Responding to HMRC enquiries

At Crest Surveyors, we provide independent Capital Gains Tax Valuations prepared by experienced RICS surveyors. Visit our Capital Gains Tax Valuations page or get in touch with our team for more information.

“One of the most common mistakes that we see is property owners relying on estimates rather than professional valuations. A well-supported valuation provides vital evidence if HMRC ever questions your calculations.”

• Thomas Awoleye MSc Eng, MRICS, C.Build E MCABE

Capital Gains Tax 6-Year Rule FAQs

What Is the 9-Month Rule For Capital Gains Tax?

The 9-month rule allows homeowners to claim Private Residence Relief for the final 9 months they own a property, even if they no longer live there. This can reduce the amount of Capital Gains Tax payable when the property is sold.

Find out more in our blog: What Is the 9-Month Rule For Capital Gains Tax?

What Is the 12-Month Rule For Capital Gains Tax?

There is no specific UK “12-month rule” for residential property Capital Gains Tax. However, some assets may qualify for different treatment depending on how long they are owned, and other countries have separate 12-month CGT rules.

Who Qualifies for 0% Capital Gains Tax?

Individuals whose total taxable gains fall within their available annual exemptions and tax bands may effectively pay 0% Capital Gains Tax. Full Private Residence Relief can also eliminate CGT on the sale of a main residence in qualifying circumstances.

What Is the CGT Lifetime Cap For 2026?

Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) has a lifetime limit of £1 million of qualifying gains. Tax legislation can change, so professional advice should be sought for current limits and eligibility.

What Is the 36 Month Rule For Capital Gains Tax?

The 36-month rule was a historic Private Residence Relief provision that allowed certain homeowners to receive relief on the final 36 months of ownership. It has since been reduced and replaced by the current 9-month exemption period.
Find out more in our blog: What Was the 36-Month Rule For Capital Gains Tax?