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Construction, Land and Property

Capital Gains Tax on sale of homes

by Claire Liddell

Capital Gains Tax (CGT) may be due when you sell a second home or a property that has not been occupied as your main home for the entire period of ownership.

For disposals of UK residential property completed since 6 April 2020, any CGT due must be declared and paid within 30 days of completion for properties that completed before 27 October 2021 and within 60 days of completion for properties that completed on or after 27 October 2021. Some conveyancing solicitors and estate agents are still unaware of this requirement or do not inform their clients about the shorter reporting period so particular care is required.

Non-resident sellers must also declare the disposal of all UK properties within the same reporting periods noted above.

The declaration must be made through an online UK property account which is a separate system from annual self assessment tax reporting. HMRC will issue you with a property account reference number, which will be used for all future UK property disposals. Tax due on the disposal is payable by logging into the property account and can be paid online. HMRC will automatically issue penalties if the reporting or tax payment is late.

Taxpayers must also report the same gain on their tax return for the year and declare how much CGT they have already paid through the UK property account. If you have paid too much Capital Gains Tax, the overpayment will be used to reduce your self assessment tax payment due by 31 January. If you have no other tax liability to offset this repayment against, the repayment will need to be requested directly from HMRC.

If you have disposed of a UK residential property and this has not already been reported to HMRC please speak to us without delay.

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