Reporting of capital gains tax on disposals of UK residential property

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Few UK residential property transactions are proceeding right now but where the date of disposal for capital gains tax (CGT), usually date of exchange on a sale but date of the transfer for a gift, is on or after 6 April 2020 and CGT is due, this must be reported to HMRC using a new online portal.  Both the reporting and payment of any tax due must be done within 30 days of completion.  

Where no CGT is due, such as where any gain is covered by a CGT relief or exemption, such as between spouses, where a house has always been a main home or the annual CGT exempt amount, no return is required.  

Both the reporting and payment of any tax due must be done within 30 days of completion.  However, to help those selling properties familiarise themselves with these changes, HMRC will not issue late filing penalties for returns received late up to and including 31 July 2020 for transactions completed between 6 April and 30 June 2020 and reported up to 31 July 2020.  Transactions completed from 1 July 2020 onwards will receive a late filing penalty if they are not reported within 30 calendar days.   In all cases, interest will accrue if the tax remains unpaid after 30 days.

There are different online portals for taxpayers reporting themselves and for agents reporting on their behalf.  In both cases, an online CGT account must first be set-up.  The taxpayer must do this and authorise the agent online, even if an agent is to do the return and that agent has authority with HMRC to deal with other UK taxes.  This requirement on taxpayers has caused issues with other taxes requiring online filing only, in particular corporation tax for non-UK companies.  The online filing service is not quite 100% functional, for example it cannot yet be used by personal representatives for someone who has died.

The existing requirement for non-UK residents to report disposals of UK residential properties in almost all cases, even if there is no gain, remains.  The filing of a CGT return by non-residents and payment of any CGT due must now both be done within the same 30 day deadline as for UK residents.  Until now, in some cases there was a longer period to do that but this no longer applies in any circumstances.

All companies (both UK and non-UK) disposing of UK residential properties are now subject to corporation tax on any gains realised and must file corporation tax returns instead.

More information

To discuss any tax points raised in this article or any other UK property tax changes, please contact our private client expert listed below

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