Capital Gains Tax Reporting UK Property

Simon Misiewicz

Simon Misiewicz

Expat & Property Tax Specialist

3rd March 2022

Capital Gains Tax Reporting To HMRC within 60 days of selling a property

UK Landlords who have sold a property and makes a taxable gain will need to report this to HMRC.

The number of days to report a capital; gain is 60 days of selling the property if the completion date was on or after 27th October 2021. Reporting a capital gain to HMRC was 30 between 6th April 2020 and 26th October 2021.

Please note that you may wish to learn how the capital gains tax liability may be reduced when selling a UK property. Be sure to click the link to read that article.

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How do I complete an HMRC UK Taxable Capital Gains Tax return? 

Paying UK Taxable Capital Gains Tax on a property is relatively straightforward.

Once you have worked out your UK taxable capital gain, you need to report them to HMRC if they are above your Capital Gains Tax allowance.

Taxable Capital Gains Tax can be reported in two ways:

– Instantly via HMRC’s real-time CGT service online

– Annually in a Self-Assessment tax return if done within 60 days of selling the relevant property

If you opt to complete a Self-Assessment tax return, you must register with HMRC.

You can schedule a Capital Tax Gains consultation with one of our property accountants to assist you.

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Avoiding CGT late filing penalties and payment penalties

CGT rules change often. It is essential to know how and when to report capital gains tax correctly.

There are different ways to report UK residential properties sold since 6th April 2020. Likewise, there are various ways to report UK residential property sold before 6th April 2020, namely the self-assessment tax return that needs to be filed by 31st January each year.

You will need to make a taxable capital gains tax computation for each gain or loss that you report. Here is where you’ll find that accurate record keeping is your best ally. You can also use our CGT calculator to identify the tax liabilities in some instances.

There are many elements of detail that you will need to obtain when submitting the CGT computation to HMRC within 60 days of the disposal:

– Date of original purchase and sale of an asset
– Capital purchase costs and legal fees associated
– Sales price less any agency and legal fees
– Capitalised costs during the holding period of the asset

It is essential to comply with the 30-day reporting rule when selling UK property. If you fail to do so, you may find that you’re subject to penalties and interest.

If you are a non-resident and sell a UK property, you must still report the asset disposal within 60 days. This 60 day CGT reporting rule applies to non-residents even if you do not owe capital gains tax.

Free UK Capital Gains Tax Calculator

We have created a free capital gains tax calculator for you to use. It will help you work out your capital gain, which needs to be reported and paid to HMRC within 60 days of the residential property sale.

Free

What if the 60 day reporting of Capital Gains Tax is incorrect? Use a capital gains tax accountant

You should have all the relevant information when you sell a buy to let property when submitting your CGT 60-day report. However, more information may arise when submitting your self-assessment tax return.

You will have more tax to pay on 31st January if it is found that you owe more CGT to HMRC than you initially disclosed and settled in the 60-day report.

Equally, you are likely to get a tax credit on your self-assessment tax return if you have overpaid CGT to HMRC on the 60-day reporting.

Do you have a potential Capital Gain?

Tell us about your potential Capital Gain so that we can help you minimise your tax liability

See how we can help you

Reporting CGT for asset disposals for non-residents

HMRC state that you must report the disposal online using the non-resident Capital Gains Tax return by the 60-day deadline, even if:

– you’ve no tax to pay

– you’ve made a loss

– you’re registered for Self Assessment

UK taxable capital gains tax is charged on disposals of “UK property” directly or indirectly owned by non-UK resident individuals. “Non-resident” includes the overseas part of a split-year. Such disposal is referred to as a Non-Resident CGT (“NRCGT”) disposal (TCGA 1992, s.14B).

Direct ownership means they own the asset (or a portion of it) in their name. Indirect ownership means that they own shares in a company that owns such assets.

UK residential property means a dwelling either used as a residence or suitable for use and is outside the charge were sold before 5th April 2015. Commercial property capital gains are outside the charge were made before 6th April 2019.

If there was a change of use of the property (or if the property was in mixed residential and non-residential use), a “fair and reasonable apportionment” of the gain could be made to reflect any time the property was not residential (TCGA 1992, Sch.4ZZB para 6) up to 6th April 2019.

In summary:

– On UK residential property, the part of the gain arising after 5th April 2015 is chargeable to CGT (as this was the date the legislation took effect for residential property). Similarly, only the post-April 2015 element of a capital loss is allowable.

– On UK commercial property, the part of the gain arising after 5th April 2019 is chargeable to CGT (as this was the date the legislation took effect for commercial property). Similarly, only the post-April 2019 element of a capital loss is allowable.

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