FINANCE
60-Day Reporting Window When Disposing of UK Residential Property
SOME UK TAXPAYERS MUST REPORT AND PAY CAPITAL GAINS TAX ( CGT ) WITHIN 60 DAYS OF DISPOSING OF UK RESIDENTIAL PROPERTY .
By CHRIS BALL , TAX ADVISORY , AZETS , Chris . ball @ azets . co . uk
What is the 60-day rule ?
The 60-day CGT reporting rules apply to UK resident and non-resident individuals , trustees , personal representatives , partners in partnerships and limited liability partnerships , and joint owners of property who are disposing of a UK residential property . UK residents need only submit this return where there is Capital Gains Tax ( CGT ) to pay , however non-residents must submit the appropriate form on any UK residential property disposal , whether tax is payable or not .
This rule only applies to disposals of residential properties which the taxpayer has a direct interest in , i . e . if they sell or gift a house , rather than those they have an indirect interest in , i . e . a disposal of company shares which hold residential property .
Some examples of situations where the 60- day rule may need to be followed include if you dispose of a :
• rental property .
• property you have never lived in .
• holiday home .
• property you have lived in for some of the time in which you have owned it .
If you are selling your main residence , the 60-day rule should not be a concern , as long as you have lived in the property throughout the entire ownership period . The rules will not apply where no CGT needs to be paid on the disposal . Some examples of this include , where :
• any gain is covered fully by exemptions or reliefs .
• the property is sold at a loss or no gain .
• the property disposal must also be reported on the self-assessment tax returns of those who fall within self-assessment with the appropriate tax paid shown .
How are disposals reported to HMRC ?
Disposals can be reported to HMRC digitally via the UK government ’ s website . In some limited circumstances , where HMRC accept that a disposal is unable to be reported digitally , a paper reporting form must be used .
How to pay the tax you owe on the disposal ?
An estimate of the CGT due on the disposal must be paid , either through the taxpayer ’ s Government Gateway account or via bank transfer or cheque . In cases where a paper return is submitted , HMRC will provide a 14-digit payment reference starting with X which should be referenced when making payment .
What ’ s the deadline for reporting and paying CGT on the disposal ?
The property disposal must be reported and the estimated CGT paid to HMRC within 60 days of the date of completion of the disposal , not the date of exchange of contracts . If the 60-day deadline is missed , late filing penalties may be charged , along with interest on any unpaid tax .
We are here to help If you have any questions about the 60-day reporting rule or capital gains tax in general or assistance with calculating and reporting the gain , please get in touch .
Local Offices : Ashford : 01233 629 255 Canterbury : 01227 454 861 Maidstone : 01622 690 666 Orpington : 01689 827 505 Sandwich : 01304 249 997
www . azets . co . uk
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