On 6 April 2020, new rules came into effect for reporting and paying Capital Gains Tax (CGT) on disposals of UK residential property. These rules apply to both UK residents and non-UK residents, and missing the deadlines can result in substantial penalties.
Here’s what you need to know.
What Changed?
If you dispose of a UK residential property and there is CGT to pay, you now have 60 days from the date of completion to report the gain and pay the tax due. (For disposals between 6 April 2020 and 26 October 2021, the deadline was 30 days.)
This applies only where CGT is payable – if there is no gain, or the gain is fully covered by reliefs or losses, the reporting requirement may not apply.
UK Residents
UK residents are required to report the disposal of a UK residential property within 60 days of completion, but only where CGT is due. The gain must be reported using HMRC’s UK Property Reporting Service, which requires a Government Gateway user ID and password.
Even if you've reported the gain through the UK Property Service, you must also declare the disposal on your Self Assessment tax return if you are required to complete one. Any CGT already paid will be credited against your final liability to avoid double taxation.
When You Don’t Need to Report:
- If the gain is covered entirely by the Annual Exempt Amount.
- If the property qualifies for Private Residence Relief in full.
- If the disposal results in a capital loss.
Non-UK Residents
Non-UK residents are subject to stricter reporting rules. They must report all disposals of UK land and property – residential or commercial – regardless of whether CGT is payable.
This includes:
- Direct disposals of property or land.
- Indirect disposals, such as selling shares in a UK property-rich company (i.e., where at least 75% of the company’s value is derived from UK property).
Even if no tax is due (e.g. due to a loss or reliefs), the return must still be filed within 60 days.
Penalties for Late Reporting and Payment
Failing to meet the 60-day reporting and payment deadline can lead to costly penalties:
- £100 fixed penalty for missing the initial 60-day deadline.
- Daily penalties of £10 per day (after 3 months), up to a maximum of £900.
- Further penalties of £300 or 5% of the tax due (whichever is greater) if the return is over 6 or 12 months late.
- Interest and late payment penalties will also apply to unpaid tax beyond the deadline.
Get in Touch
At Arnold Hill, we’re here to make the CGT reporting process as smooth and stress-free as possible. From calculating your gain to navigating HMRC’s online systems, our team ensures your obligations are met accurately and on time.
Contact us today for expert advice and support with your UK property disposal.
Author, Drupen Patel - Personal Tax Manager
