Landlords considering portfolio changes face an important decision about timing, particularly around the tax year end on 5th April. The choice between selling before or after this date carries different implications for tax planning, market conditions, and practical completion timelines.

Selling before tax year end

Completing a sale before 5th April brings several potential advantages for tax planning. Landlords can utilise their current year's capital gains tax annual exempt amount, which might otherwise go unused. This becomes particularly relevant for those who haven't made other capital disposals during the tax year.

The approach also provides certainty about which tax year the gain falls into, allowing for clearer financial planning. Landlords know exactly when tax becomes due and can arrange their finances accordingly without uncertainty about future tax year allowances or rates.

However, selling before tax year end requires careful timeline management. Property transactions typically take between eight and twelve weeks from offer acceptance to completion. Landlords looking to complete before 5th April ideally need to accept offers by early January at the latest, potentially requiring marketing to commence in late autumn or early winter.

This timing can coincide with traditionally quieter market periods. Fewer buyers actively search during winter months, potentially affecting the pool of interested parties and achievable sale prices. The pressure to complete by a specific date may also reduce negotiating flexibility if complications arise during the transaction process.

Selling after tax year end

Completing after 5th April provides greater flexibility in transaction timing. Landlords can market properties during spring when buyer activity typically increases, potentially attracting more interest and competitive offers. This seasonal advantage often results in stronger sale prices compared to winter marketing.

The extended timeframe reduces pressure during the sales process. Landlords can address survey issues, negotiate terms, and manage completion logistics without the constraint of a fixed tax year deadline. This flexibility often leads to smoother transactions with reduced stress for all parties.

Deferring the capital gains tax liability to the following tax year provides additional time to arrange payment. The tax doesn't become due until 31st January following the end of the tax year in which completion occurs. A sale completing in April 2026 wouldn't require tax payment until January 2028, providing substantial breathing space for financial planning.

However, this approach uses the following year's annual exempt amount rather than the current year's allowance. Landlords need to consider their broader tax planning strategy and whether they anticipate other capital disposals in the subsequent tax year that might also benefit from the exemption.

Market timing considerations

Beyond tax planning, landlords should factor in local market conditions. Areas experiencing strong demand might warrant earlier marketing regardless of tax year timing, whilst locations with seasonal buyer patterns may benefit from spring marketing even if this pushes completion beyond 5th April.

Rental income during the decision period also deserves consideration. Properties generating strong rental returns until sale might justify delayed marketing, whereas vacant properties or those requiring significant maintenance expenditure create stronger incentives for prompt sale regardless of tax year timing.

Individual circumstances matter

The optimal timing depends heavily on individual circumstances rather than universal rules. Landlords with multiple properties might benefit from staggering sales across tax years to maximise use of annual exempt amounts.

Those planning significant portfolio changes may need professional advice on timing multiple disposals efficiently.

Personal financial situations also influence timing decisions. Landlords requiring sale proceeds for specific purposes may prioritise completion timing over tax efficiency, whilst those with flexibility can optimise around tax planning considerations.

Making the decision

Landlords should evaluate their specific situation considering unused annual exempt amounts, anticipated future capital disposals, local market conditions, property rental status, and personal financial requirements.

Professional tax advice often proves valuable when significant sums are involved or circumstances are complex.

The choice between selling before or after tax year end represents one element of effective portfolio management rather than a decision with definitively right or wrong answers.

Speak to an advisor about your sale