New Capital Gains Tax regime - Disposals of UK residential property

24.08.2020
Victoria McIntosh
Tax

From 6 April 2020, UK residents disposing of UK residential property are required to report the disposal to HMRC and pay any Capital Gains tax liability within 30 days of the completion date. Residential property includes land that has held a dwelling at any time.

Reporting

HMRC have launched a new digital service in order to facilitate the reporting. A Government Gateway account will be required in order to create a UK property account. 

Any disposals reported using the UK property account will also need to be included on your Self-Assessment tax return. A tax credit will be available if you have already made a payment on account of the capital gains tax. 

It is possible to amend the returns after they have been submitted – however, amendments cannot be made after you have filed your self-assessment return. In this case, you would need to submit an amended tax return. 

A separate return will be required for each disposal of UK residential property. However, if you dispose of multiple properties on the same day, then these can be reported on one return.

Which gains are reportable?

Most UK residential property disposals by landlords are likely to be reportable, however there are some disposals that are outside the scope of the new rules, including:

  • Disposals where gains are fully covered by the capital gains tax annual exemption (currently £12,300)
  • Transfers between spouses

If you sell your main residence, then providing you lived in the property throughout the period of ownership, then the disposal will be exempt and no reporting will be required.

If you dispose of a property overseas, then this does not need to be reported within 30 days. The disposal will simply be included on your Self-Assessment tax return in the usual way.

Failure to Report 

HMRC will apply late filing penalties where a disposal is not reported by the due date. In addition, late payment interest will be applied in respect of the capital gains tax payments where due. 

What about Non-Residents? 

The 30 day reporting for non-UK residents has been in force since 6 April 2015. Non-UK residents are required to report all disposals of UK residential property, regardless of whether there is a capital gain. 

In addition, the non-resident capital gains tax regime now includes commercial property.

If you have recently disposed of a UK residential property, and would like assistance calculating the gains and reporting the disposal to HMRC, we are able to assist.

For more information

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