Sold a house. Tax?
Discussion
I have just sold a house that wasn't my main residence.
Bought in 2008 for £60k and just sold for £115k.
I'm at the top end of standard rate income tax.
After paying off the mortgage and all fees the solicitor will be transferring around £64k to me.
I am aware I need to pay capital gains tax and also believe I will pay tax on the income. Feels wrong to be taxed twice but that's the rules.
What do I need to do next? Am I as well appointing an accountant to sort it? Will my employer be notified of my tax change? Can I pay a lot of my work income into my pension for the rest of the financial year to reduce the tax take?
Bought in 2008 for £60k and just sold for £115k.
I'm at the top end of standard rate income tax.
After paying off the mortgage and all fees the solicitor will be transferring around £64k to me.
I am aware I need to pay capital gains tax and also believe I will pay tax on the income. Feels wrong to be taxed twice but that's the rules.
What do I need to do next? Am I as well appointing an accountant to sort it? Will my employer be notified of my tax change? Can I pay a lot of my work income into my pension for the rest of the financial year to reduce the tax take?
Robot says
1. Capital Gains Tax (CGT) on the property sale
• You bought for £60k and sold for £115k.
• Gain before allowances = £55k.
• Deduct any allowable costs (solicitor fees on purchase/sale, estate agent fees, stamp duty at purchase, improvement costs if they were capital, not maintenance).
• Everyone gets an Annual CGT Allowance (£3,000 for 2024/25).
• Net gain is then taxed at property CGT rates:
• 18% on the portion of the gain within your basic rate band,
• 28% on the portion that pushes you into higher rate.
Since you’re already “at the top end of standard rate income tax,” it sounds like most (if not all) of your gain will fall into the 28% band.
So rough calculation:
• Gain ? £55k – £3k = £52k taxable.
• £52k × 28% ? £14.5k CGT bill (before deducting exact allowable costs).
2. Do you also pay Income Tax on this money?
No — this isn’t taxed as income.
You only pay CGT on the gain. You don’t then also pay income tax on the proceeds you receive from the solicitor.
That’s a common misconception — you are not taxed twice here.
3. What do you need to do next?
• You must report and pay CGT to HMRC within 60 days of completion (via the UK “Capital Gains Tax on UK property” online service). Your solicitor doesn’t do this for you.
• You’ll need your Government Gateway login or set one up.
• You’ll also need to report it again on your self-assessment tax return for that tax year (even if you don’t normally do one, you’ll have to this year).
4. Do you need an accountant?
• If the gain is straightforward (buy price, sell price, fees, no major complications), you can do it yourself online.
• If you want peace of mind, or you’ve got improvements, reliefs, or multiple properties, then yes, an accountant is worth the fee.
5. Will your employer be notified?
• No.
Your employer doesn’t get involved — it’s between you and HMRC. This won’t affect your PAYE tax code unless you leave the CGT unpaid and HMRC tries to collect via code adjustment.
6. Can you use pension contributions to reduce the tax bill?
• Pension contributions reduce income tax liability, not capital gains.
• They won’t reduce your CGT directly.
• But making big pension contributions can bring more of your taxable income back down into the basic rate band, which could allow some of your gain to be taxed at 18% instead of 28%.
• Whether that’s worthwhile depends on your income level, pension allowances, and headroom in the basic rate band.
Immediate action:
1. Work out your gain properly (include all deductible costs).
2. Report and pay via HMRC’s online CGT system within 60 days.
3. Decide if you want an accountant to double-check and possibly optimise the calculation.
1. Capital Gains Tax (CGT) on the property sale
• You bought for £60k and sold for £115k.
• Gain before allowances = £55k.
• Deduct any allowable costs (solicitor fees on purchase/sale, estate agent fees, stamp duty at purchase, improvement costs if they were capital, not maintenance).
• Everyone gets an Annual CGT Allowance (£3,000 for 2024/25).
• Net gain is then taxed at property CGT rates:
• 18% on the portion of the gain within your basic rate band,
• 28% on the portion that pushes you into higher rate.
Since you’re already “at the top end of standard rate income tax,” it sounds like most (if not all) of your gain will fall into the 28% band.
So rough calculation:
• Gain ? £55k – £3k = £52k taxable.
• £52k × 28% ? £14.5k CGT bill (before deducting exact allowable costs).
2. Do you also pay Income Tax on this money?
No — this isn’t taxed as income.
You only pay CGT on the gain. You don’t then also pay income tax on the proceeds you receive from the solicitor.
That’s a common misconception — you are not taxed twice here.
3. What do you need to do next?
• You must report and pay CGT to HMRC within 60 days of completion (via the UK “Capital Gains Tax on UK property” online service). Your solicitor doesn’t do this for you.
• You’ll need your Government Gateway login or set one up.
• You’ll also need to report it again on your self-assessment tax return for that tax year (even if you don’t normally do one, you’ll have to this year).
4. Do you need an accountant?
• If the gain is straightforward (buy price, sell price, fees, no major complications), you can do it yourself online.
• If you want peace of mind, or you’ve got improvements, reliefs, or multiple properties, then yes, an accountant is worth the fee.
5. Will your employer be notified?
• No.
Your employer doesn’t get involved — it’s between you and HMRC. This won’t affect your PAYE tax code unless you leave the CGT unpaid and HMRC tries to collect via code adjustment.
6. Can you use pension contributions to reduce the tax bill?
• Pension contributions reduce income tax liability, not capital gains.
• They won’t reduce your CGT directly.
• But making big pension contributions can bring more of your taxable income back down into the basic rate band, which could allow some of your gain to be taxed at 18% instead of 28%.
• Whether that’s worthwhile depends on your income level, pension allowances, and headroom in the basic rate band.
Immediate action:
1. Work out your gain properly (include all deductible costs).
2. Report and pay via HMRC’s online CGT system within 60 days.
3. Decide if you want an accountant to double-check and possibly optimise the calculation.
Out of interest why would you need to initiate self assessment if this is a one off sale and straight forward CGT payment and separate from income?
I ask because once you register for SA you're usually on it until HMRC decide to take you off it - which could be years, even when you're employed PAYE.
It happened to me many years ago when I queried being PAYE why they decided to ask me to complete SA. Their answer was they didn't have to give one and for good measure had the 'courtesy' to tell me there were three more forms in the post for the previous 3yrs as well
I ask because once you register for SA you're usually on it until HMRC decide to take you off it - which could be years, even when you're employed PAYE.
It happened to me many years ago when I queried being PAYE why they decided to ask me to complete SA. Their answer was they didn't have to give one and for good measure had the 'courtesy' to tell me there were three more forms in the post for the previous 3yrs as well

AND - VERY IMPORTANT
You only have 60 days to file the CGT return AND pay the CGT arising.
If you haven't done so you need to sign up to HMRC CGT Residential Property filing and paying system without delay -
https://www.gov.uk/report-and-pay-your-capital-gai...
You only have 60 days to file the CGT return AND pay the CGT arising.
If you haven't done so you need to sign up to HMRC CGT Residential Property filing and paying system without delay -
https://www.gov.uk/report-and-pay-your-capital-gai...
Eric Mc said:
AND - VERY IMPORTANT
You only have 60 days to file the CGT return AND pay the CGT arising.
If you haven't done so you need to sign up to HMRC CGT Residential Property filing and paying system without delay -
https://www.gov.uk/report-and-pay-your-capital-gai...
Just quoting to keep bumping it up. This is very important and they dish out fines like sweeties. We successfully appealed against ours as we're abroad and HMRC like to send their post extremely slowly and we couldn't use the online system due to being abroad. We had called them and said we were sending it and fortunately this was recorded on the notes and they cancelled the fine but don't wait.You only have 60 days to file the CGT return AND pay the CGT arising.
If you haven't done so you need to sign up to HMRC CGT Residential Property filing and paying system without delay -
https://www.gov.uk/report-and-pay-your-capital-gai...
Fwiw I’ve used various tax relief schemes ( VCT / EIS based ) in the past but iro offset of CGT from shares sold and I assume these can also be used for CGT relief from 2nd house / BTL sales ?
But these obviously involve further investment and are by nature high or very high risk.
They also shouldn’t be undertaken lightly nor just based on the tax relief they give - the investment has to make sense in its own right !
But these obviously involve further investment and are by nature high or very high risk.
They also shouldn’t be undertaken lightly nor just based on the tax relief they give - the investment has to make sense in its own right !
Just a quick question on this.
I have nearly completed the online calculation and have taken my earnings from my personal profile on the employer intranet. This is annual salary + out of hours allowance for carrying a phone. A + B = total earnings.
So far so good.
However I am also on a company bonus scheme that pays up to 7.5% based on multiple factors plus a potential multiplier up to 1.5x.
The bonus amount is not known until a few weeks before it is paid which is usually March.
There is a question on the government portal asking if any of the figures are estimated.
Do I put yes due to my actual annual earnings not being known accurately at this point?
Thank you.
I have nearly completed the online calculation and have taken my earnings from my personal profile on the employer intranet. This is annual salary + out of hours allowance for carrying a phone. A + B = total earnings.
So far so good.
However I am also on a company bonus scheme that pays up to 7.5% based on multiple factors plus a potential multiplier up to 1.5x.
The bonus amount is not known until a few weeks before it is paid which is usually March.
There is a question on the government portal asking if any of the figures are estimated.
Do I put yes due to my actual annual earnings not being known accurately at this point?
Thank you.
RotorRambler said:
Robot says
1. Capital Gains Tax (CGT) on the property sale
You bought for £60k and sold for £115k.
Gain before allowances = £55k.
Deduct any allowable costs (solicitor fees on purchase/sale, estate agent fees, stamp duty at purchase, improvement costs if they were capital, not maintenance).
Everyone gets an Annual CGT Allowance (£3,000 for 2024/25).
Net gain is then taxed at property CGT rates:
18% on the portion of the gain within your basic rate band,
28% on the portion that pushes you into higher rate.
Since you re already at the top end of standard rate income tax, it sounds like most (if not all) of your gain will fall into the 28% band.
So rough calculation:
Gain ? £55k £3k = £52k taxable.
£52k × 28% ? £14.5k CGT bill (before deducting exact allowable costs).
2. Do you also pay Income Tax on this money?
No this isn t taxed as income.
You only pay CGT on the gain. You don t then also pay income tax on the proceeds you receive from the solicitor.
That s a common misconception you are not taxed twice here.
3. What do you need to do next?
You must report and pay CGT to HMRC within 60 days of completion (via the UK Capital Gains Tax on UK property online service). Your solicitor doesn t do this for you.
You ll need your Government Gateway login or set one up.
You ll also need to report it again on your self-assessment tax return for that tax year (even if you don t normally do one, you ll have to this year).
4. Do you need an accountant?
If the gain is straightforward (buy price, sell price, fees, no major complications), you can do it yourself online.
If you want peace of mind, or you ve got improvements, reliefs, or multiple properties, then yes, an accountant is worth the fee.
5. Will your employer be notified?
No.
Your employer doesn t get involved it s between you and HMRC. This won t affect your PAYE tax code unless you leave the CGT unpaid and HMRC tries to collect via code adjustment.
6. Can you use pension contributions to reduce the tax bill?
Pension contributions reduce income tax liability, not capital gains.
They won t reduce your CGT directly.
But making big pension contributions can bring more of your taxable income back down into the basic rate band, which could allow some of your gain to be taxed at 18% instead of 28%.
Whether that s worthwhile depends on your income level, pension allowances, and headroom in the basic rate band.
Immediate action:
1. Work out your gain properly (include all deductible costs).
2. Report and pay via HMRC s online CGT system within 60 days.
3. Decide if you want an accountant to double-check and possibly optimise the calculation.
I am no expert but aren't the rates 18% and 24% (not 28%) ?1. Capital Gains Tax (CGT) on the property sale
You bought for £60k and sold for £115k.
Gain before allowances = £55k.
Deduct any allowable costs (solicitor fees on purchase/sale, estate agent fees, stamp duty at purchase, improvement costs if they were capital, not maintenance).
Everyone gets an Annual CGT Allowance (£3,000 for 2024/25).
Net gain is then taxed at property CGT rates:
18% on the portion of the gain within your basic rate band,
28% on the portion that pushes you into higher rate.
Since you re already at the top end of standard rate income tax, it sounds like most (if not all) of your gain will fall into the 28% band.
So rough calculation:
Gain ? £55k £3k = £52k taxable.
£52k × 28% ? £14.5k CGT bill (before deducting exact allowable costs).
2. Do you also pay Income Tax on this money?
No this isn t taxed as income.
You only pay CGT on the gain. You don t then also pay income tax on the proceeds you receive from the solicitor.
That s a common misconception you are not taxed twice here.
3. What do you need to do next?
You must report and pay CGT to HMRC within 60 days of completion (via the UK Capital Gains Tax on UK property online service). Your solicitor doesn t do this for you.
You ll need your Government Gateway login or set one up.
You ll also need to report it again on your self-assessment tax return for that tax year (even if you don t normally do one, you ll have to this year).
4. Do you need an accountant?
If the gain is straightforward (buy price, sell price, fees, no major complications), you can do it yourself online.
If you want peace of mind, or you ve got improvements, reliefs, or multiple properties, then yes, an accountant is worth the fee.
5. Will your employer be notified?
No.
Your employer doesn t get involved it s between you and HMRC. This won t affect your PAYE tax code unless you leave the CGT unpaid and HMRC tries to collect via code adjustment.
6. Can you use pension contributions to reduce the tax bill?
Pension contributions reduce income tax liability, not capital gains.
They won t reduce your CGT directly.
But making big pension contributions can bring more of your taxable income back down into the basic rate band, which could allow some of your gain to be taxed at 18% instead of 28%.
Whether that s worthwhile depends on your income level, pension allowances, and headroom in the basic rate band.
Immediate action:
1. Work out your gain properly (include all deductible costs).
2. Report and pay via HMRC s online CGT system within 60 days.
3. Decide if you want an accountant to double-check and possibly optimise the calculation.
https://www.gov.uk/capital-gains-tax/rates
Terminator X said:
CGT on 2nd houses and over seems well out of order to me. Taxing people on things they bought with already taxed money should not be allowed.
Too late if you own one but a great incentive to avoid 2nd houses and buy old cars or something instead. No CGT on them afaik. Yet.
The tricky bit is making a gain on an old car. But you could use the loss to offset the gain on your second house Too late if you own one but a great incentive to avoid 2nd houses and buy old cars or something instead. No CGT on them afaik. Yet.

As ever HMRC are always the winners.
£60k in 2008 is equivalent to £103k now so hardly any appreciable gain in real terms. Can't deduct mortgage interest or upkeep of the house. AI mentions 'renovations' and states it covers the following, so you may be able to get the figure down if you have done any of the following.
- Structural additions: Extensions, loft conversions, conservatories
- Permanent upgrades: New kitchens, bathrooms, heating systems, double glazing, solar panels
- Landscaping: Installing a driveway or redesigning the garden (not routine maintenance)
- Accessibility adaptations: Ramps, widened doorways, etc.
£60k in 2008 is equivalent to £103k now so hardly any appreciable gain in real terms. Can't deduct mortgage interest or upkeep of the house. AI mentions 'renovations' and states it covers the following, so you may be able to get the figure down if you have done any of the following.
- Structural additions: Extensions, loft conversions, conservatories
- Permanent upgrades: New kitchens, bathrooms, heating systems, double glazing, solar panels
- Landscaping: Installing a driveway or redesigning the garden (not routine maintenance)
- Accessibility adaptations: Ramps, widened doorways, etc.
Scarletpimpofnel said:
I am no expert but aren't the rates 18% and 24% (not 28%) ?
https://www.gov.uk/capital-gains-tax/rates
Correct.https://www.gov.uk/capital-gains-tax/rates
Rich1973 said:
Just a quick question on this.
I have nearly completed the online calculation and have taken my earnings from my personal profile on the employer intranet. This is annual salary + out of hours allowance for carrying a phone. A + B = total earnings.
So far so good.
However I am also on a company bonus scheme that pays up to 7.5% based on multiple factors plus a potential multiplier up to 1.5x.
The bonus amount is not known until a few weeks before it is paid which is usually March.
There is a question on the government portal asking if any of the figures are estimated.
Do I put yes due to my actual annual earnings not being known accurately at this point?
Thank you.
Enter your best estimate of the bonus.I have nearly completed the online calculation and have taken my earnings from my personal profile on the employer intranet. This is annual salary + out of hours allowance for carrying a phone. A + B = total earnings.
So far so good.
However I am also on a company bonus scheme that pays up to 7.5% based on multiple factors plus a potential multiplier up to 1.5x.
The bonus amount is not known until a few weeks before it is paid which is usually March.
There is a question on the government portal asking if any of the figures are estimated.
Do I put yes due to my actual annual earnings not being known accurately at this point?
Thank you.
You will need to update HMRC after the end of the tax year - possibly by completing a self assessment tax return.
RotorRambler said:
Robot says
Deduct any allowable costs (solicitor fees on purchase/sale, estate agent fees, stamp duty at purchase, improvement costs if they were capital, not maintenance).
The line between improvements and maintenance is quite blurred. But if you were letting the house out, you'd probably be better pushing things towards "maintenance" and offsetting the cost against rental income, rather than to "capital" and offsetting CGT. Note that you can't do both. Deduct any allowable costs (solicitor fees on purchase/sale, estate agent fees, stamp duty at purchase, improvement costs if they were capital, not maintenance).
In CGT talk, they use the term "enhancement expenditure". They mean by this, expenditure that actually improves or enhances the property. Therefore normal maintance and repairs are NOT allowed. Even certain types of "capital" costs are not allowed. For example, replacing a kitchen hob with another hob would not be treated as "enhancement expenditure". However, replacing old single glazed windows with modern double glazed units would.
Eric Mc said:
However, replacing old single glazed windows with modern double glazed units would.
I believe that's no longer the case. https://www.gov.uk/hmrc-internal-manuals/business-...Terminator X said:
CGT on 2nd houses and over seems well out of order to me. Taxing people on things they bought with already taxed money should not be allowed.
Too late if you own one but a great incentive to avoid 2nd houses and buy old cars or something instead. No CGT on them afaik. Yet.
TX.
Please stop giving Rachel from accounts more ideas on further ways to steal our money!Too late if you own one but a great incentive to avoid 2nd houses and buy old cars or something instead. No CGT on them afaik. Yet.
TX.

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