CGT is calculated on the net gain: the sale price minus the original purchase cost and allowable deductions. Certain costs such as improvement works and some transaction fees may reduce the taxable gain, but the precise list of allowable expenses should be confirmed with a qualified tax adviser.
Non-UK residents have been within the scope of CGT on UK residential property since 2015 and on all UK real estate thereafter. Critically, there is a strict reporting deadline after completion of a sale, regardless of whether any tax is ultimately owed. Both the deadline and the applicable rates vary and can change, so always check GOV.UK or take professional advice before transacting.
As a practical example, an investor who buys a flat in Manchester for one price and sells it years later at a higher price will generally owe CGT on the gain. Reliefs such as Private Residence Relief exist where a property has been a main home, but eligibility depends on individual circumstances that a tax adviser must assess.
For overseas buyers, CGT liability begins the moment a UK property sale completes and the reporting window can be very tight, making pre-purchase tax planning an essential step rather than an afterthought.