Selling a residential property? There’s a new 30-day reporting rule!

There was a new rule that was introduced by HMRC and it has slipped completely under the radar because of everything else going on in the world. But its important everyone knows about this new rule!

Historically if you owned a property that’s chargeable to CGT you might not tell your accountant until after the tax year ends because nothings due immediately.

Now if you do this you will be subject to a fine from HMRC.

That is because if you sell a residential property in the UK, from 6 April 2020, you will have 30 days to tell HMRC and pay any Capital Gains Tax owed from the date of completion. Previously, this amount would have been recorded and paid on your annual self-assessment tax return.

If you do not tell HMRC about any Capital Gains Tax within the 30 days of completion, you may be sent a penalty, as well as having to pay interest on what you owe. These new rules affect both UK and non-UK residents. However, these new rules do not apply to transactions involving non-UK property.

So, it is important to let your accountant know when you sell a property, I mean you should be contacting them for tax advice on the sale anyway right!


What is Capital Gains Tax?

Capital Gains Tax is a tax on the profits from when you sell specific assets that have increased in value. There are many exemptions to Capital Gains Tax and therefore we suggest that you contact your accountant to ensure the correct amount of Tax due is calculated.


When you need to report Capital Gains Tax within 30 days

If you live in the UK, you may need report and pay Capital Gains Tax when you sell or otherwise dispose of:

  • a property that you’ve not used as your main home
  • a holiday home
  • a property which you let out for people to live in
  • a property that you’ve inherited and have not used as your main home

You will not have to make a report and make a payment when:

  • a legally binding contract for the sale was made before 6 April 2020
  • you meet the criteria for full Private Residence Relief
  • the sale or disposal was made to a spouse or civil partner
  • the gains (including any other chargeable residential property gains in the same tax year) are within your tax free allowance (called the Annual Exempt Amount)
  • you sold the property for a loss
  • the property is outside the UK
  • If you are unsure whether your property meets any of the criteria above, please contact us and we will be able to identify this for you.

Non-UK residents

If you are a non-UK resident you must continue to report sales in UK property or land, regardless of whether there is a Capital Gains Tax liability within 30 days of completion of the disposal.

You will no longer be able to defer payment of Capital Gains Tax via your Self-Assessment return, and any tax owed must be paid within the 30-day reporting and payment period.

This includes disposals of residential properties, non-residential properties and indirect disposals.

From 6 April 2020 non-UK residents will be able to use the new online service, which will replace the current reporting service.


How do I submit the new Capital Gain Tax return?

You do not your accountant will do it for you and advise you of payment details.

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