Date posted: 12th Feb 2024
Since April 2020, where capital gains tax (CGT) is payable on the disposal of a UK residential property, this must be paid (and declared) within a certain number of days post completion.
CGT is usually payable on residential properties that have not been an individual’s only home throughout the period of ownership. For example, on sales (or gifts) of buy to let properties and second/holiday homes.
At the moment, any CGT due will need to be declared (and potentially paid) within 60 days of completion. A separate stand-alone tax return is also required to be submitted to HMRC with the same information transmitted to HMRC on the annual self assessment tax return, if one is required.
The regime is slightly different for non-residents selling UK residential property – they will need to declare the sale within 60 days, regardless of whether they have CGT to pay.
An odd quirk, to the rules occurs around this time of year (February/March) as there is no need to submit a separate stand-alone CGT return, where the information will be declared on a self assessment tax return filed within 60 days of completion. For example, lets say the property sale completes on 29 February 2024. As long as the 2023/24 Return is then filed within 60 days (say by 25 April 2024), then there is no need to file a separate stand alone CGT return. In addition, as the gain is declared via self assessment, the taxpayer would have until 31 January 2025, to pay the CGT, instead of the normal 60 day timeframe.
We are still seeing new clients who are unaware of the 60 day rule – it is important to ensure that it is adhered to, as late filing penalties will be imposed by HMRC.
If you have any queries regarding property taxes, please contact us.
