You cannot split the gain on a single property sale across two tax years, because for CGT the whole gain arises on the date contracts are exchanged. But you can choose which tax year that falls in. Exchanging after 5 April moves the gain into the next tax year, and if you sell more than one property, or share ownership with your spouse, you can spread a property sale over two tax years to use two annual exempt amounts and two sets of rate bands.
Timing a property sale over two tax years is one of the simplest legal ways to cut Capital Gains Tax, but it depends on getting the date of disposal right. HMRC’s Capital Gains Manual explains the date of disposal for assets sold under contract.
This guide explains when a property sale is taxed, how to spread a property sale over two tax years where possible, a worked example for 2025/26 and 2026/27, and the 60-day reporting trap to watch.
When Is a Property Sale Taxed for CGT?
For Capital Gains Tax, the date of disposal is the date an unconditional contract is exchanged, not the completion date. If the contract is conditional, for example on planning permission, the disposal happens when the condition is met.
That means:
- Exchange on 3 April 2026 and complete on 20 April 2026: the gain falls in 2025/26.
- Exchange on 7 April 2026 and complete on 30 April 2026: the gain falls in 2026/27.
The 60-day reporting deadline is different. It runs from completion, so in the first example the return is due 60 days after 20 April 2026, even though the gain belongs to the earlier tax year. See our guide to the 60-day capital gains tax rule.
Can You Split One Property Sale Over Two Tax Years?
Not as a single disposal. The whole gain on one property is taxed in the tax year of exchange, even if the buyer pays in stages. Where the sale price is genuinely paid in instalments over more than 18 months, you can ask HMRC to let you pay the tax in instalments, but the gain itself is still taxed in one year.
There are legitimate ways to get the benefit of a property sale over two tax years:
- Choose the better tax year. If your income will be lower next year, for example after retirement, exchanging after 5 April keeps more of the gain at 18%.
- Share ownership with your spouse or civil partner. Transferring a share before exchange gives two annual exempt amounts and two basic rate bands in the same year. See CGT on jointly owned property.
- Sell separate assets in different years. Land, a garden plot sold separately or a second property can be sold in a different tax year from the main sale.
Worked Example: A Property Sale Over Two Tax Years
Mark owns two buy-to-lets, each with a gain of £30,000 after costs. He is a higher rate taxpayer in 2025/26 and retires on 31 March 2026, so his income in 2026/27 will be £20,000, leaving £30,270 of his basic rate band unused.
| Both sold in 2025/26 | One in 2025/26, one in 2026/27 | |
|---|---|---|
| Total gain | £60,000 | £30,000 + £30,000 |
| Annual exempt amounts | (£3,000) | (£3,000) in each year |
| Taxable gains | £57,000 | £27,000 + £27,000 |
| CGT in 2025/26 | £57,000 at 24% = £13,680 | £27,000 at 24% = £6,480 |
| CGT in 2026/27 | – | £27,000 at 18% = £4,860 |
| Total CGT | £13,680 | £11,340 |
By planning the property sale over two tax years and exchanging on the second property after 5 April, Mark saves £2,340: £720 from a second annual exempt amount and £1,620 from the lower 18% rate in his retirement year. Our guide on whether to sell your rental property now or wait looks at timing decisions in more detail.
Things to Check Before Planning a Property Sale Over Two Tax Years
- Market risk. Delaying exchange to save tax is only worthwhile if the buyer and price are secure.
- Rate changes. CGT rates and allowances can change at a Budget, so check the rules for both years.
- Income in each year. Your other income decides how much of the gain is taxed at 18% or 24%.
- Spouse transfers first. Any transfer to a spouse must happen before exchange to count.
- Payment timing. Under the 60-day rule you pay soon after completion, so selling in April does not delay payment until the following January.
For more ways to cut the bill, read our guide to capital gains tax planning for property investors and how to reduce capital gains tax on property.
Reporting the Sale
Report and pay any CGT on UK residential property within 60 days of completion using a UK property account on GOV.UK, using the tax year of exchange for the rates and allowance. Then include the gain on your Self Assessment return for that year. Current bands are in our guide to CGT rates for 2026, and you can estimate the tax with our property CGT calculator.
Frequently Asked Questions
Can I spread capital gains over two years in the UK?
Not on a single asset. The gain is taxed in the tax year of exchange. You can spread gains by selling different assets, or shares of an asset owned with your spouse, in different tax years.
Is the CGT date of disposal exchange or completion?
For an unconditional contract, it is the date of exchange. For a conditional contract, it is the date the condition is satisfied. The 60-day reporting deadline runs from completion.
Does selling after 6 April reduce capital gains tax?
It can, if you have not used that year’s £3,000 annual exempt amount yet or your income will be lower in the new tax year. It does not help if rates rise or your income is higher.
Can I pay capital gains tax in instalments?
Only in limited cases, such as where the buyer pays you over more than 18 months. You must ask HMRC, and the gain is still taxed in the year of exchange.
Can I transfer half my property to my wife to save CGT?
Yes, if you are married or in a civil partnership and living together, the transfer is free of CGT. Both of you then use your own allowance and rate bands when the property is sold. The transfer must happen before exchange.
What is the best month to sell a property for CGT?
There is no best month as such, but exchanging just after 5 April starts a new tax year with a fresh annual exempt amount, which can help if you have already made gains in the current year.
Conclusion
You cannot split one property’s gain across two tax years, but you can choose which year it falls in by controlling the exchange date. If you own more than one property, or co-own with your spouse, you can spread a property sale over two tax years to use two allowances and lower rate bands.
Plan the timing before exchange, check your income in both years, and remember the 60-day deadline runs from completion.
For advice on timing your property sale, speak to our property CGT specialists. Call us on +44 (0)1204 859315 or send us your question for a free initial consultation and a fixed-fee quote within 24 hours.
