Don’t Miss The 60 Day CGT Deadline

Don’t miss the 60 day deadline! It is now well established that taxpayers have 60 days from the date of completion to report a property disposal and pay any Capital Gains Tax (CGT) to HMRC. Those within Self Assessment must also report their disposal on the Capital Gains section of their tax return for the relevant tax year.

Given that 60 days is not a great deal of time, particularly for more complex cases, it is important to have all relevant information prepared with the deadline in mind.

It should be noted however that non-UK residents are subject to different reporting requirements compared to UK residents.

UK Residents

Only disposals of UK residential properties that result in a CGT liability are reportable on a CGT return within 60 days. If the disposal results in no tax liability, then a CGT return is not required.

For commercial property disposals, a CGT return is not necessary and the disposal does not need to be reported within the 60 day timeframe. Instead, the disposal is reportable on a Self Assessment tax return, with the tax payable by 31 January following the end of the relevant tax year. If the individual is not within Self Assessment, then the disposal can be reported to HMRC via the ‘real-time’ CGT reporting service and the tax is payable within the same time frame as Self Assessment.

Those with ‘mixed-use’ properties should not disregard the 60 day deadline. The residential aspect of the property must be reported via a CGT Return within 60 days of completion, if the disposal results in a CGT liability. A valuation of the property around the completion date is useful in this situation as it helps apportion the property between the commercial and residential aspects, ensuring the relevant proportion of CGT is paid within 60 days. The apportionment can also be calculated using square footage or proceeds should the property sale proceeds be split in this way. Any tax due on the commercial aspect will be paid through Self Assessment or the ‘real-time’ CGT reporting service.

Non-UK Residents

All disposals of UK land or property are required to be reported within 60 days of the completion date. This includes disposals of UK land or property even if there is no tax due or if a loss has arisen. Any gifts of UK land or property must therefore be reported within 60 days of the gift.

If you are unsure about your UK residency status, please get in touch as we would be happy to review your position.

It is important to be aware of the late filing penalties that HMRC impose should a CGT return be filed after the 60 day deadline. These penalties escalate the longer the return remains unfiled. Initially, a £100 fixed penalty is charged for late filing. Should the CGT return not be filed within 3 months after the 60 day deadline, an additional daily penalty of £10 may be applied, accruing up to a maximum of £900. Finally, if the return remains unfiled, a further penalty of £300 or 5% of the tax due (whichever is higher) is charged. It is therefore important to know your reporting requirements and file and pay any CGT on time, so as to avoid any late filing penalties and late payment interest that HMRC would apply.

Get In Touch

If you are thinking of selling or gifting land or property and would like further information or assistance, please do contact your local Whitings office.

Disclaimer - All information in this post was correct at time of writing.