Capital Gains Tax returns – what do I need to know?

Selling a property can be stressful at the best of times. To add to the complexities, you might then need to deal with your Capital Gains Tax (CGT) obligations immediately following completion.  

We have listed some frequently asked questions below which may assist you in determining your obligations. In many cases, Private Residence Relief (PRR) will apply in full where the property has been the taxpayer’s main residence throughout the period of ownership, meaning there is no CGT or reporting requirement. However, with strict penalties for non-compliance and late returns, it is important to seek the appropriate advice on your property disposal even if you think you don’t have any tax to pay. Please contact us using the contact details below for further advice. 

Do I need to file a CGT return? 

From 6 April 2020, UK residents disposing of UK residential property are required to notify HMRC of the disposal within 60 days of completion and pay any CGT due.  

Are there any exemptions? 

There are a small number of cases where a CGT return will not be required, for example as mentioned above, where a property was the taxpayer’s main residence throughout the period of ownership and PRR applies in full.  

What if I am a non-UK resident? 

Non-UK residents are required to report sales or disposals of interests in UK property or land (residential or non-residential) within 60 days of completion, regardless of whether there is a CGT liability. 

If the property is jointly owned, can we submit one CGT return? 

If there is more than one owner of the property, a separate CGT return will be required for each owner. 

How do I submit the return and make payment? 

As your authorised agent, we can prepare and submit the return to HMRC on your behalf.  

Once the CGT return has been submitted to HMRC, you will be issued with a payment reference number which you will need when making payment. 

If I already submit self-assessment tax returns, do I still need to submit a CGT return? 

Yes. Do not wait until you submit your self-assessment tax return to report the property disposal to HMRC as you may have to pay interest and penalties if you do. The only exception to this is where the self-assessment tax return is filed to HMRC within 60 days of the transaction completing, meaning that the tax return is filed before the due date for filing the UK property disposals return.

What happens if I submit the return late or payment is late? 

HMRC have confirmed that penalties and interest will apply.  

Do the above rules apply to non-resident companies? 

The rules for non-resident companies are different, as such companies are liable to corporation tax on a disposal of UK land. The company must register with Companies House within 3 months of becoming liable to tax, and a Corporation Tax return will need to be filed to report the disposal to HMRC. 

For more information, please contact Marina Trinchese or fill out the form below and we will be in touch.