Capital Gains Tax Bridging Loans
When you sell a UK residential property on which Capital Gains Tax is due, HMRC requires you to report and pay the estimated CGT within 60 days of the completion date - not exchange. For landlords and investors who reinvest sale proceeds immediately, this 60-day window often arrives before the cash is liquid.
Pay CGT Within the 60-Day Deadline
A CGT bridging loan covers the tax bill, secured against your existing property or the new purchase, while your sale funds settle.
CGT Bridging Loans - August 2026
| Scenario | Rate range | Security | Notes |
|---|---|---|---|
| CGT on BTL sale - proceeds reinvested in new purchase | 0.65%-0.80%/month | Existing property or new purchase | Classic scenario. Bridge until reinvested funds are accessible. |
| CGT on second home sale - no new purchase | 0.65%-0.80%/month | Retained property (PPOR or investment) | Bridge against retained property. Exit: repay from sale proceeds once settled. |
| CGT on multiple property disposals in one year | 0.70%-0.90%/month | Any suitable property security | Multiple disposals can create combined CGT exceeding available cash. |
| CGT for executor / personal representative | 0.75%-0.95%/month | Estate property | Estate property used as security. Bridge until estate is distributed. |
| Large CGT liability (£100,000+) | 0.65%-0.80%/month | Prime residential security preferred | Larger liabilities attract lender competition. Better rates achievable. |
Indicative rates - August 2026. Rates change daily. Actual rate depends on LTV, security, credit profile, loan size, and exit strategy. Contact our team for a live rate comparison for your specific case. All rates sourced from lender product sheets and publicly available market data.
What determines your rate
The 60-day clock starts at completion
The CGT deadline runs from the date of completion of the property sale - not exchange of contracts. Conveyancing solicitors do not automatically notify HMRC; the obligation rests with the seller (or their accountant). If completion is 1 September 2026, the CGT deadline is 31 October 2026. Missing this deadline triggers penalties (£100 immediately, £300 at 6 months) plus 7.75% interest from day 61.
CGT rates in 2026/27
Residential property CGT rates from April 2026: 18% on gains falling within the unused basic rate income tax band (up to £50,270), 24% on gains above the basic rate threshold. The annual exempt amount is £3,000 - the first £3,000 of net gains in the tax year is tax-free. On a typical BTL sale with a £60,000 gain, a higher-rate taxpayer pays approximately £13,720 CGT (£60,000 - £3,000 × 24%).
Why proceeds are often unavailable at the CGT deadline
Landlords who sell one property and immediately purchase another commit the sale proceeds to the new purchase deposit and SDLT before the CGT is calculated. The CGT liability may only become clear once the accountant files the 60-day return. By that point, cash is committed and the CGT bill is due. A bridge solves this timing mismatch without disrupting the new investment.
Security for a CGT bridge
Security can be any suitable residential, commercial, or mixed-use property - including the new property just purchased, an existing portfolio property, or a primary residence (regulated bridge). The CGT bill being paid does not need to be related to the property used as security.
Worked cost example
Scenario: BTL sold for £320,000. Original purchase cost £180,000. Gain: £140,000. After annual exempt amount (£3,000): taxable gain £137,000. CGT at 24%: £32,880.
Proceeds reinvested in new BTL purchase (completion same week). CGT deadline: 60 days from completion.
CGT bridge: £32,880 secured against existing portfolio property worth £280,000 (11.7% LTV).
Rate: 0.65%/month (very low LTV). Term: 2 months until quarterly rent covers repayment.
Bridge cost: interest £428 + arrangement fee (2%) £658 + legal £1,200 = £2,286.
HMRC penalty if 60-day deadline missed by 30 days: £100 immediately + 7.75% interest on £32,880 for 30 days = £210.
HMRC penalty at 6 months: £300 further penalty + ongoing interest.
NET SAVING at 30 days: HMRC (£310) is £1,976 cheaper than bridge (£2,286) for a short delay.
NET SAVING at 90 days: HMRC (~£800) is £1,486 cheaper than bridge - but bridge eliminates all enforcement risk.
CONCLUSION: For CGT specifically, bridge is most valuable for CERTAINTY - preventing a permanent compliance record issue. Repaid from first full rental quarter on new property.
Cost of missing deadline (60 days + 30 days additional = 90 days late): £100 penalty + £300 at 6 months + 7.75% interest = approximately £860 in interest alone on £32,880.
Bridge cost (£2,286) buys 2 months of time and avoids penalty risk entirely.
Repaid from first full rental quarter on new property.
Rate context and outlook
CGT rates on residential property were revised from October 2024 (Autumn Budget 2024), aligning most CGT rates with the previous residential property rates. For 2026/27: basic rate taxpayers pay 18%, higher rate taxpayers pay 24%. The annual exempt amount reduced sharply from £12,300 (2022/23) to £3,000 from April 2024 - meaning significantly more gains are now taxable, increasing the CGT liability for landlords who previously relied on the exempt amount to cover modest gains.
Get a personalised rate comparison for your case
Independent, whole-of-market advice across 130+ specialist lenders. Doulton Money Ltd is authorised and regulated by the Financial Conduct Authority, FRN 814533.
Frequently asked questions
When does the 60-day CGT clock start?
The 60-day deadline runs from the date of completion of the property sale - not the date of exchange of contracts. If you exchanged in October but completed in November, your deadline is 60 days from the November completion date. The deadline is reported through HMRC's Capital Gains Tax on UK property online account - a separate system from your annual self-assessment return.
What happens if I miss the 60-day CGT deadline?
Missing the 60-day deadline triggers: an immediate £100 penalty, a further £300 penalty at 6 months, and late payment interest at 7.75% per annum from day 61. You must still file and pay as soon as possible - the longer the delay, the higher the interest accrual. A CGT bridging loan arranged before the deadline costs significantly less than the combined penalty and interest exposure.
Can I use a bridging loan to pay CGT if I don't own another property?
A bridging loan requires property as security. If you have sold your only property and do not own another, a property-backed bridge is not available. In that situation, a business loan (if you are a company) or an unsecured personal loan may be alternatives - though at higher rates. Speak to us about your specific situation and we will identify the most appropriate route.
Does the bridging loan itself create any additional tax liability?
No - borrowing money is not a taxable event. The interest you pay on the bridge is not deductible against the CGT liability (CGT has its own deductible costs - purchase costs, improvement costs, sale costs - but not financing costs). However, if the bridge is used against a rental property, the bridging interest may be deductible against rental income depending on the purpose of the borrowing. Take specific tax advice.
How quickly can a CGT bridging loan complete?
For a straightforward case with a clear security property and a simple exit strategy, 7-14 working days from application. Where the security is a standard residential property and an automated valuation is available, some lenders can move in 5-7 working days. Contact us as soon as you complete the sale - do not wait until the deadline is imminent.
Explore tax payment finance
Get a tax bridging quote today
Tell us the tax type, the amount and the deadline. We compare terms across a panel of 130+ specialist lenders and come back with a live rate comparison for your case.