UK Property Disposals

Since 6 April 2015 if you were a non-UK resident you had to report the sale of your UK property to HM Revenue and Customs (HMRC) within 30 days. HMRC have now extended this legislation to also include UK residents.

From 6 April 2020 any residential property or land disposals by UK residents need to be reported to HMRC within 30 days of the completion date.  Any capital gains tax (CGT) due will also need to be paid within this 30-day period.

If you do not report and pay before the deadline you may get a late filing penalty and may be charged interest if you do not do this by the 30-day deadline. HMRC have not imposed late filing penalties for those properties which were sold prior to July providing they are reported by the 31 July.

Please note that the sale or disposal will still need to be reported on yourself assessment return.

Reporting requirements

Please see the below information to identify whether you meet the new reporting requirements.

UK residents

If you sell or otherwise dispose of any of the following on or after 6 April 2020 you will need to make the CGT report within 30 days:

  • a property that you’ve not used as your main home
  • a holiday home
  • a property which you let out
  • a property that you’ve inherited and have not used as your main home

However, if you meet the below exceptions you may not have to report the sale or disposal within 30 days:

  • a legally binding contract for the sale was made before 6 April 2020
  • you meet the criteria for full Private Residence Relief
  • the sale or disposal was made to a spouse or civil partner
  • the gains (including any other chargeable residential property gains in the same tax year) are within your tax free allowance (called the Annual Exempt Amount)
  • the gain is covered by losses made prior to the sale
  • you sold the property for a loss
  • the property is situated outside the UK

A disposal that is a grant of a lease for no premium made to a person who is not connected with the grantor and disposals made by charities or a disposal of any pension scheme investments are exempt.

Non-UK residents

There have been no changes since 6 April 2015 and any sale or otherwise disposal of UK property or land must be reported to HMRC within 30 days of the completion date.

This includes disposals where there is no CGT liability.

Any CGT liability due will need to be paid within the 30-day period and can no longer be deferred through yourself assessment tax return.

CGT Liability Payment

As mentioned above the CGT liability will also need to be paid within 30 days from completion.

HMRC recognise however, that in some cases estimates will need to be taken.  This is with the view that when the actual information is attained an amendment will be made either through the CGT property return or self-assessment return (if filed before).

Please note that if the CGT is underestimated interest will be charged on the additional amount.

The payment of CGT made through the property return will be taken as a payment on account towards the total income tax and CGT liability realised once the self-assessment return has been completed.

The self-assessment return will take president over the property return.

We would also advise you to contact your tax adviser as soon as you decide to list your property for sale.  This will ensure that all steps are taken to gather the relevant information in order to file the return by the 30-day deadline if required. Please note that the above information is not exhaustive, and should you have any uncertainty on what is required please contact the tax team to discuss further.