With effect from 6 April 2020 UK resident taxpayers are required to report and pay any capital gains tax due on the sale of UK residential property within 60 days of completion (the deadline changed from 30 days to 60 with effect from 27 October 2021).
Typical examples of residential property include:
- Holiday homes
- Rental properties
- A property that has never been occupied, or only occupied for part of the ownership period
The gain should be reported to HMRC using the Capital Gains on UK Property Account Service. This service is open to both taxpayers and their agents who can file a return on the taxpayers’ behalf.
If the property disposed of has more than one owner, each owner must report and pay capital gains tax separately on their share of the property.
Sales of property that do not trigger a capital gains liability (either through relief’s, exemption or sold at a loss) do not need to be reported to HMRC.
Property that has always been used as the owner’s principal private residence should not be caught by the reporting procedure.
Taxpayers that complete self assessment tax returns are required to file a capital gains tax return through the Capital Gains on UK Property Account Service as well as completing the capital gains supplementary pages in the appropriate tax return.
The rules for reporting capital gains on the sale of residential property extend to trusts, personal representatives dealing with estates, partners in partnerships and LLP’s.
These rules follow the similar reporting regime for non-UK tax residents which came into force with effect from April 2015 (and expanded in April 2019).