CGT is a tax on the profit (the gain) an individual makes when they sell an asset that has increased in value. Note that it is a tax that individuals pay, and not limited companies.
This tax is payable on the gain made on the sale of a property after deducting purchase and selling costs such as stamp duty, legal fees, the estate agency fees and some capital improvements. It is also payable if a landlord transfers a property to a limited company, using the deemed market value.
CGT is only payable if the total gains in a tax year are above the annual tax free allowance. In the 2022-23 tax year it is £12,300, reducing to £6,000 in 2023-24 and £3,000 from the 2023-25 tax year. The rules are more complex if the property was the seller’s principal residence before being let, eg accidental landlords.
Private landlords pay 28% of the gains from residential property over the tax free allowance. They must report gains over the tax free allowance to HMRC within 60 days of completion.
HMRC guide to CGT.