I’m selling a property I bought with someone else – how is the gain taxed?

Hi Nicola,

You will probably have bought your property as tenants in common as you are not a married couple. This means there are specific ownership stakes that you both hold in the property. There should be a deed of trust which states this. Assuming that the deed of trust stipulates a 50% share each then you will both be liable to half of the Capital Gains Tax (CGT) gain. You will both be able to offset your portion of the gain against the (now very modest) Annual Exempt Amount from CGT. That is £3,000 in the current 2025-26 tax year.

You will pay either 18% or 24% on the non-exempt portion of the gain, depending on your personal tax rates and the size of the gain. The taxable gain is added to your income; any component of the combined amount that exceeds the basic rate band for Income Tax will incur higher rate CGT at 24%.

You will need to calculate these figures personally and report separately to HMRC. It is worth highlighting that you and your brother cannot wait for your self-assessment tax return. You must report and pay CGT on residential property within 60 days on the sale. You do this through a specific ‘Capital Gains Tax on UK property’ account with HMRC, which you must set up for this purpose.

Annoyingly this was quietly introduced in the middle of COVID and quite a lot of conveyancing solicitors fail to highlight it to their clients. There was a time when HMRC were generous in waiving the resulting fines (in an implicit admission that the implementation of this rule change had been poorly executed), but as time has gone on they have become less lenient.

Hope this helps.