Capital Gains Tax: 60 Day Reporting & Payment

#3 Capital Gains Tax: 60 Day Reporting & Payment

In brief

• UK residents who sell residential property in the UK must report the sale to HMRC and pay any Capital Gains Tax due within 60 days of completion.
• The 60-day return is separate from your Self Assessment return.
• Non-UK residents must report disposals of UK property even where there is no tax to pay.
• Late reporting brings penalties and interest.

What the 60-day rule covers

The rule applies to disposals of UK residential property that give rise to a Capital Gains Tax liability. The 60 days run from the date of completion. The sale needs to be reported through HMRC's online property reporting service, and any tax is paid at the same time as the return.

Who has to report

A UK resident individual, trustee or personal representative must report when tax is due. If the gain is covered by Private Residence Relief or the annual exempt amount and no tax is due, there is generally no need to report. Non-residents must report all disposals of UK land and property, including commercial property and indirect disposals, even where no tax is payable.

Working out the gain

The gain is the sale proceeds less the cost, the costs of buying and selling and the costs of improvements. Reliefs can reduce or remove it, including Private Residence Relief for your main home and, in some cases, relief for periods of absence and final period exemption. Gains are taxed at 18% or 24% depending on your income. The annual exempt amount is small, so any gain above it is generally taxable. Your tax is calculated using your income for the year, and you may have to estimate it when the return is due.

Penalties and interest

A late return incurs a fixed penalty, with further penalties if it is more than six months or twelve months late. Interest runs on tax paid late. A payment on account made through the property service is a good way to be on time. If you have a loss, you should still look at reporting it in the proper way so that it can be used later.

Planning ahead

Before you sell, gather the purchase paperwork, solicitor's statements, receipts for improvements and any valuation. Think about who owns the property, as a married couple can use two annual exempt amounts and two basic rate bands. See our page on Capital Gains Tax advice.

Frequently asked questions

Is the 60-day deadline extendable?

No. It is a fixed deadline unless you have a reasonable excuse.

Do I need to report if I sold my main home?

Usually not, if Private Residence Relief covers the whole gain.

Can an adviser file the return for me?

Yes, with the right authority from you.

If you would like to talk this through for your own situation, book a free call with our team.