Capital Gains Tax – payment deadline for residential sales

The deadline for payment of Capital Gains Tax “CGT” due from the sale of residential property is now 60 days after the date of sale. 

An increase in value on a property from the date of sale from the original ownership will trigger a CGT liability if the property does not qualify for certain tax reliefs during the period of its ownership. These reliefs relate to when the property qualifies as your main residence and whether it has been let for a qualifying period of time. 

 

HMRC requires UK residents to submit a CGT return and pay any CGT due within 60 days of completion of the sale of residential property. 

The requirement to submit a CGT return will be different from the self-assessment tax return process entirely and will only be required where there will be tax due on the sale. If you can submit your tax return for the year in question before the expiry of the 60 days then you will not need to file a separate capital gains report. This will only apply to sales which occur just before the tax year end. 

 

These requirements will not extend to the disposal of foreign residential property where the foreign country has a double tax agreement with the UK or, where the gain relates to a person who is taxed on the remittance basis. 

 

If you are non resident but sell a UK residential property which is subject to capital gains tax you must report the sale and gain or loss within 60 days irrespective whether there is any tax due. 

Individuals who are considering a sale should take time to ensure that they are prepared to understand whether a payment or a return is due. 

 

If you are currently registered for self-assessment then you will have a unique taxpayer’s reference ‘UTR’ however, if you are not currently in the self-assessment regime or have not been in the past you may now need to request a UTR from HMRC. 

 

Careful consideration will need to be taken to ensure that the correct amount of tax is calculated. As some property disposals will be taking place at the start of the tax year, it is difficult at that point to determine the relevant tax rates if an individual’s tax affairs vary between the higher and lower rates. 

We are happy to help assist in this process. As always, please contact us. 

Please do let us know if you have any questions or if you need any further help understanding the guidance – please call us on 01932 564098 or message us here. 

 

This article was published in October 2022 – please be aware that the information above may have changed in subsequent months. This note is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or for taking professional advice.