60-day window to report residential property gains
If you realise a chargeable gain on a UK residential property, you now have 60 days rather than 30 days in which to tell HMRC about the gain and make a payment on account of the tax that is due.
A chargeable gain may arise on the sale of a residential property if that property has not been occupied as your only or main home throughout the period that you have owned it. This may be the case if you sell an investment property, such as a buy-to-let or a holiday let, or a second home.
Create an online account
In order to report the gain to HMRC, you will need to set up an online ‘Capital Gains on UK property’ account. You will need your Government Gateway user ID and password to do this (or will need to set one up if you do not already have one). You can also use the account to pay any tax that you owe, view, and change previous returns.
Report the gain
Following the sale of a UK residential property in respect of which there is a chargeable gain, you need to report the gain online within 60 days from the date of completion. For completions prior to 27 October 2021, the reporting window was 30 days. Penalties are charged if the reporting deadline is missed.
Pay the tax
You must also pay tax on account of the gain within 60 days of completion. Interest is charged if the tax is paid late.
The amount you must pay is the best estimate of the tax due at the date of sale. Losses realised previously in the tax year or brought forward can be taken into account, as can the annual exempt amount, if this has not been used already.
Marjorie sells her holiday cottage. Completion is on 28 January 2022. She realises a gain of £60,000.
Previously in the 2021/22 tax year, she sold some shares, realising a loss of £4,000. She has made no other disposals in 2021/22
Marjorie is a higher rate taxpayer.
She can set the loss earlier in the year and her annual exempt amount for 2021/22 of £12,300 against the gain, reducing it to £43,700 (£60,000 – £4,000 – £12,300).
She must therefore report the gain and make a tax payment of £12,236 (£43,700 @ 28%) by 29 March 2022 – 60 days from the completion date.
As the end of the year there may be some adjustment after the tax return is filed, and it is possible that a repayment may arise if losses are realised on later disposals in the tax year.
Partner note: TCGA 1992, Pt. 11; Sch. 1B.