A resident of the UK who owes Capital Gains Tax (CGT) on the sale of a UK residential property must record and pay the CGT within 30 days of the sale as of April 5, 2020. For completion dates on or after October 27, 2021, the 30-day term will be extended to 60 days. Only disposals completed before October 27, 2021 are subject to the 30-day deadline.
Some of the landlords have approached us to ask if they must utilise HMRC’s new digital reporting system to make a capital gains tax disclosure even if no tax is owed. When you dispose of a buy-to-let property, you have to consider the capital gains tax implications and declare and pay any tax payable within 30 days of selling it (60 days w.e.f. October 27, 2021).
If you are a UK resident, no report or disclosure is required if you make a loss or gain that is covered by the capital gains tax annual allowance (£12,300 in 2021/22 and locked until 5 April 2026) or a relief. Non-UK residents must file a report regardless of any tax due or not. If an official from HMRC tells you that you don’t have to reveal anything, you must get written confirmation – or at the least retain a dated record of the conversation and the officer’s identification if you may be questioned in future. When working with HMRC, it’s important to know that as a general guideline.
We will discuss the following topics in this article:
Are there any disadvantages to revealing?
The Rule of 30 Days
How do I declare & file a capital gains tax return?
Are there any drawbacks to disclosing?
Simply expressed, the answer is no. There is no point in taking the risk of failing to report capital gains tax after selling a buy-to-let property because it will result in a penalty and interest on any unpaid capital gains tax. Although selling any of your properties takes time and involves a lot of documentation, those aren’t good excuses to keep it undisclosed.
We always encourage being methodical and cautious when dealing with HMRC, as well as seeking our assistance along the road, proof of transparency and good confidence will almost definitely serve you well in the future.
See also: Capital Gains Tax on Property Sold Overseas
The 30-days rule (60 days rule w.e.f 27 October 2021)
If you make a sale of a residential property from your buy-to-let pool, you must submit and pay any capital gains tax due within 30 days of the sale (extended to 60 days from October 27, 2021). You will be charged an initial £100 late-filing penalty if you fail to inform HMRC or us as your accountant within 30 days (60 days w.e.f. 27 October 2021) of any capital gains tax liability. If you make a six months delay, you will face further penalties of £300 or 5% of the tax due (whichever is higher), and the same fines are applicable if you are twelve months late.
Even if they do not owe any taxes, non-residents would be liable to the late filing penalty. This includes UK residential landlords or overseas who own second homes, houses that are not their primary residence, and also, buy-to-let properties.. As a result, understanding this rule is critical.
How to make a capital gains tax disclosure?
We at Tax Advisor UK gather all of the information on your sale of property once we receive it before enrolling into HMRC’s capital gains tax on UK property portal to declare and pay any capital gains tax due within 30 days of completion (60 days w.e.f. 27 October 2021).
Even if no capital gains tax is owed, non-UK nationals must now use this procedure to register sales of residential, commercial, or agricultural property or land in the UK. Without the need for clarification from HMRC, we should know this rule.
In the United Kingdom, the laws governing residential properties held in trust are similar to those that apply to UK residents. The same 30-day requirement applies (60-day rule effective October 27, 2021), but this time we log in to the capital gains tax account for UK property using a distinct unique taxpayer reference supplied by the trust registration service.
We recommend you to settle your liability using HMRC’s real-time capital gains tax service once we’ve assessed the figure of your gain and the tax due.
It’s crucial to avoid a late-payment penalty by meeting the deadline — and as early as possible before the deadline, is better, in case any questions emerge.
How TaxAdvisor UK can help
At TaxAdvisor UK , our experts will provide you 30 minutes free consultation and help you in managing all your tax and accounting work. Speak to our expert accountants, tax advisor on (0203) 5381276 or fill an online form today. We can have a consultation session over the phone, virtual or face to face meeting and will provide you with a no obligation fixed quote
