How is a limited company taxed when it sells property?

In short: A limited company doesn't pay Capital Gains Tax when it sells property or shares. Its profit on the sale is a chargeable gain, added to its other profits and taxed at Corporation Tax rates of 19% to 25% for 2026, with no annual exempt amount. Indexation allowance still applies, but only up to December 2017 (GOV.UK: Work out a chargeable gain when your company sells assets).

The gain goes on the company's CT600 in boxes 210 to 220, explained in our CT600 boxes guide, and the tax is paid with the company's other Corporation Tax. Rent follows different rules, covered in Corporation Tax for a property rental company.

Does a limited company pay Capital Gains Tax when it sells property?

No. A UK limited company pays Corporation Tax on a gain, not Capital Gains Tax: the law says "capital gains tax is not charged on gains accruing to a company" and charges Corporation Tax instead (TCGA 1992 s.1).

The company's net gains for the accounting period are added to its other profits, such as rent or trading profit, and Corporation Tax is charged on the total. For the financial year starting 1 April 2026 that is 19% on profits up to £50,000, 25% over £250,000, and 25% less marginal relief in between (GOV.UK rates and allowances). Both limits are divided between associated companies and cut for short periods, so a large gain can move all of the company's profit into a higher band (how marginal relief works).

How do company gains differ from Capital Gains Tax for individuals in 2026?

A company gets no annual exempt amount, doesn't use the Capital Gains Tax rates and doesn't file the 60-day UK property return. GOV.UK says the annual exempt amount "is not available to companies" disposing of UK residential property (GOV.UK: Capital Gains Tax rates and allowances).

The 60-day return is for Capital Gains Tax, and even a non-resident company reports UK property gains "on a Corporation Tax return" (GOV.UK: Capital Gains Tax for non-UK residents on UK property). One difference favours companies: indexation, which individuals lost for disposals from April 2008.

Figures checked on 24 September 2026 against GOV.UK (UK property reporting, paying Corporation Tax) and HMRC CG17200.

How do you work out a company's chargeable gain?

A company's chargeable gain is the sale price, less selling costs, less the purchase price and buying costs, less improvement costs, less indexation allowance. Maintenance costs can't be deducted (GOV.UK: work out a chargeable gain). Deductible buying and selling costs include agents', surveyors' and legal fees and Stamp Duty Land Tax (TCGA 1992 s.38).

1. Proceeds: the sale price, or market value for a gift, a sale at an undervalue to help the buyer, or a disposal to a connected person (TCGA 1992 s.17 and s.18).
2. Less costs of sale: agent's and solicitor's fees.
3. Less cost: the purchase price plus buying costs.
4. Less enhancement: improvements still reflected in the property when sold.
5. Less indexation allowance: on steps 3 and 4 only; costs of sale aren't indexed (HMRC CG17240).

How does indexation allowance work for companies after December 2017?

A company's indexation allowance is calculated only up to December 2017, however late the sale. The law allows no indexation "for months after December 2017", and none at all on spending incurred on or after 1 January 2018 (TCGA 1992 s.53 and s.54).

Each cost is multiplied by an indexation factor: the rise in the Retail Prices Index from the month the cost was incurred to December 2017, divided by the index for that earlier month and rounded to three decimal places. HMRC publishes the factors in its December 2017 indexation allowance table. Indexation can reduce a gain to nil but can't create or increase a loss.

Worked example: what tax does a company pay on selling a rental flat in 2026?

A company that bought a rental flat for £150,000 in March 2012 and sells it for £240,000 in 2026 makes a chargeable gain of £59,285, and with no other profits pays £11,960.52 of Corporation Tax on it. Buying costs were £3,000 and selling costs £4,000.

The indexation factor is 0.155: RPI was 240.8 for March 2012 and 278.1 for December 2017 (ONS series CHAW), and (278.1 − 240.8) ÷ 240.8 = 0.1549, rounded to 0.155, the figure in HMRC's December 2017 table.

The £59,285 gain falls between £50,000 and £250,000, so marginal relief applies. Tax at the main rate is £59,285 × 25% = £14,821.25. Marginal relief is (£250,000 − £59,285) × 3/200 = £2,860.73, using HMRC's formula with no exempt distributions (HMRC CTM03925). Corporation Tax is £11,960.52, an effective rate of 20.2%. Without indexation the tax would be £18,245, so indexation saves £6,284.48.

With £40,000 of other profits the £59,285 gain costs more than 25%, because profit between £50,000 and £250,000 carries a marginal rate of 26.5% (HMRC CTM03925). The example assumes a 12-month accounting period, no associated companies, no capital losses, and letting to unconnected tenants, so the company isn't a close investment-holding company taxed at 25% on everything (HMRC CTM03951). Financial years 2025 and 2026 share the same rates and limits. Try other figures in the Corporation Tax calculator.

Figures checked on 24 September 2026.

Is a property company's sale a chargeable gain or a trading profit?

A company that holds property to let normally makes a chargeable gain when it sells, while a developer or dealer holding property as trading stock makes a trading profit. HMRC says land "is capable of functioning both as an investment or as trading stock", and that an asset producing rent is presumed more likely to be an investment (HMRC BIM20250).

The transactions in UK land rules tax dealing in or developing land, including land held as trading stock, as a trade, but don't apply to buying a property to earn rental income or to hold for rent and capital growth (HMRC BIM60555). Borderline cases turn on the badges of trade, such as how long the property was held and whether a sale was planned from the start (HMRC BIM60025). A developer's profit goes in CT600 box 155 (Trading profits), not the chargeable gains boxes.

What happens if the company makes a capital loss?

A capital loss can only be deducted from chargeable gains, "not from trading income or other profits" as GOV.UK puts it, so it never reduces the company's rent or trading profit (GOV.UK: Work out a chargeable gain when your company sells assets). Losses of the same accounting period are deducted first, then unused losses from earlier periods, and any balance is carried forward (TCGA 1992 s.2A).

Capital allowances claimed on the asset reduce the loss, and a loss on a disposal to a connected person can only be used against gains on disposals to that same person at a time when they are connected (TCGA 1992 s.18). The reverse direction works: a trading loss can be claimed against total profits, which include chargeable gains (CTA 2010 s.37).

When are gains on shares exempt under the substantial shareholding exemption?

A company's gain on selling shares in another company is exempt from Corporation Tax under the substantial shareholding exemption when it held at least 10% of the shares for a continuous 12 months in the six years before the sale and the company sold was trading. The three conditions in TCGA 1992 Schedule 7AC are:

• Size: at least 10% of the ordinary share capital, plus at least 10% of the distributable profits and of the assets on a winding up.
• Time: held throughout a 12-month period beginning not more than six years before the sale.
• Trading: the company whose shares are sold was a trading company, or the holding company of a trading group or subgroup, throughout the latest 12-month period by reference to which the shareholding condition is met, until the sale.

Since 1 April 2017 the selling company needn't be trading itself. No claim is needed: if the conditions are met the gain is exempt and a loss isn't allowable (HMRC CG53005). If the buyer is connected with the seller, the company whose shares are sold must also qualify immediately after the sale. Shares failing any condition produce an ordinary chargeable gain.

Where does a company report a chargeable gain on the CT600?

A company reports gains in CT600 boxes 210 (Gross chargeable gains), 215 (Allowable losses including losses brought forward) and 220 (Net chargeable gains), which is box 210 minus box 215. Box 215 can't exceed box 210, and capital losses arising in the period also go in box 825, "Capital losses (amount)".

HMRC asks for a calculation of each gain and loss, with any claims or elections, to be attached (HMRC Company Tax Return guide). The tax is due 9 months and 1 day after the accounting period ends. A property sold under an unconditional contract belongs to the period in which contracts are exchanged, not completed (TCGA 1992 s.28).

Taxley calculates chargeable gains for most sales of UK property and of shares bought in one go, including indexation and the substantial shareholding exemption. It doesn't cover other assets, sales to someone connected with the company, or reliefs such as rollover relief; those need a figure you work out yourself. See property company tax returns, or take the 30-second check to see whether Taxley fits your company.

Frequently asked questions

Do companies get the £3,000 Capital Gains Tax allowance?

No. The £3,000 annual exempt amount for 2026 to 2027 is for individuals, personal representatives and trustees for disabled people. GOV.UK says it isn't available to companies selling UK residential property; a company's gains are taxed as part of its profits.

Is indexation allowance still available to companies in 2026?

Yes, for costs incurred before 1 January 2018. Indexation runs only to December 2017, whenever the sale happens, using HMRC's December 2017 table. It can't create or increase a loss.

Does a company have to report a UK property sale within 60 days?

No. The 60-day return is for Capital Gains Tax, which companies don't pay. A company reports the gain in CT600 boxes 210 to 220 and usually pays the tax 9 months and 1 day after its accounting period ends.

Which accounting period does a property sale fall in?

The period in which contracts are exchanged, not the completion date. Under TCGA 1992 s.28, a disposal under a contract happens when the contract is made, or, for a conditional contract, when the condition is satisfied.

Can a company give a property to a shareholder to avoid the gain?

No. A gift, a distribution to shareholders or a sale to a controlling shareholder is treated as made at market value, so the company is taxed on the gain a market-value sale would produce.