From 6 April 2020 disposals of residential property by UK taxpayers that give rise to a UK tax liability need to be reported to HMRC on a special capital gains tax (CGT) return. Usually the tax on residential property will be dealt with through an electronic submission but in some circumstances a paper form can be used.
Initially you had 30 days from completion of the property sale to file your CGT return. You now have 60 days from completion. However failure to meet the deadline could result in penalties being charged. You will definitely be charged interest on late paid tax if you miss the 60 day deadline.
We are aware that HMRC will start to send out letters from the end of March 2022 to individuals who disposed of UK residential property in early 2021/22 but who have not filed a return for CGT. If you receive one of these letters it does not necessarily mean you have tax to pay. The letter will urge you to consider the need to file a late return and pay over some tax.
Residential property disposals caught for tax
The types of disposals that give rise to CGT liabilities are usually:
Residential property disposals by trustees and personal representatives dealing with the estate of a deceased individual are also subject to the 60 day rules. The above rules do not apply to Companies. They continue to declare residential property gains on their CT600 company tax returns. Disposals of commercial property do not fall within the 60 day rules. Commercial property disposals go on an individual’s self assessment tax return. The tax is due on 31 January after the year of disposal.
Non UK residents need to report disposals of all property (residential or non-residential) within 60 days of completion and pay the CGT in the same time frame.
If you are uncertain whether you have any CGT to pay on a property disposal or want help with a 60 day CGT return contact Jan Friend. We will make sure that you claim all the available reliefs and exemptions. We want you to pay the minimum tax required by law.
The content in this blog is correct as at 30 March 2022 See terms and conditions.