If as a UK tax resident you are considering selling a second home or residential investment property situated in the UK, there are going to be changes to the reporting requirements which are due to come into effect from 6 April 2020.

The position pre-6 April 2020 was that the disposal of a second home or residential investment property in the UK must be disclosed on a self-assessment tax return for anyone already in the self-assessment system. The tax return had to be submitted to HM Revenue & Customs by 31 January following the end of the tax year in which the disposal took place (the key date is the date of exchange). If there was a capital gains tax liability to pay, this must be settled by 31 January following the end of the tax year in which the disposal took place.

For anyone who is not already in the self-assessment system the disposal can be reported via HM Revenue & Customs’ “Real Time” Capital Gains Tax Service.

With effect from 6 April 2020, the disposal of the UK property must be reported to HM Revenue & Customs within 30 days following the date of completion. Since 27 October 2021, the 30-day deadline was extended to 60 days from the date of completion. Please see our blog “Budget 2021 – Capital Gains Tax on the Disposal of Residential Property

In addition the payment of the capital gains tax liability also must be made within the same timeframe of 60 days from the date of completion. The original 30-day deadline introduced on 6 April 2020 was to bring the reporting requirements in line with the non-resident capital gains tax regime.

If there is more than one disposal of residential property made then each sale will need to be reported separately and payment made accordingly.

The changes do not apply to disposals where the capital gain is covered in full by principal private residence relief, losses brought forward from previous years or the capital gains tax annual exemption.

Where the gain is only partially covered by any of the scenarios in the paragraph above then the disposal will need to be reported and any capital gains tax payable within 60 days.

These changes are going to have an impact on individuals wishing to sell residential property, not only in the additional compliance that is required but also from a cash flow perspective. Care and consideration will need to be taken when looking to sell a residential property after 6 April 2020 and advice should be sought well in advance of a disposal taking place.

Author: Anthony Barron, Tax Manager, Plus Accounting

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Date Published: 6 March 2019

Last Updated: 17 June 2022