In 2020 HMRC introduced a new system for paying capital gains tax (CGT) due from selling residential property in the UK, but many solicitors and estate agents are still unaware of the new requirements.
You need to report to HMRC your gain from selling a home on:
- the UK Property Account (normally online) within 60 days of completing the property sale – and pay the CGT due by the same date; and
- Your self-assessment (SA) tax return by 31 January after the tax year in which the sale was made.
If you make a loss when selling (or giving away) the property, or the gain is covered by CGT exemptions – for example because you lived in the property as your main home – you do not have to report the transaction within 60 days. However you may still need to report the loss on your SA tax return.
If you have not completed the UK Property Account to report your gain by the time your annual SA tax return is due you must complete the UK Property Account first. The HMRC system will not allow you to complete your UK Property Account online after your SA return has been accepted so you will need to submit the UK Property Account on a paper form, which is a pain. There will be penalties to pay for submitting a late UK Property Account.
We can help you calculate the tax due when you sell a property but please inform us promptly of the sale to avoid penalties arising on late returns or late payments.
Other Autumn Tax Briefing 2022 articles