60 day reporting requirement of capital gains on residential property
A little known change to the rules re reporting and paying capital gains tax on the sale of a residential property happened in 2020.
HMRC figures show tens of thousands of people didn’t submit CGT returns and pay their CGT on time on the sale of residential properties in the 2020/21 tax year. HMRC have now started checking and are issuing fines for late filing of the CGT returns and late payment of the CGT due.
At the time, HMRC provided very little publicity about the changes, so it’s not a surprise that so many people didn’t know about it. Furthermore, lots of solicitors and estate agents havn’t been warning their clients about the deadlines for submitting CGT returns and paying the CGT due.
Under current rules, someone who sells a residential property, upon which they have capital gains tax to pay (maybe because it was rented out for part of the whole period of ownership), the seller must submit a CGT return to HMRC and pay the CGT due within just 60 days of the date of sale.
The sale must also be reported on the seller’s annual self assessment tax return, where the CGT already paid is deducted from any taxes due under the self assessment tax return.