Sale of Residential Property – UK tax resident individuals

From 6 April 2020, the UK Capital Gains Tax (CGT) rules on reporting the sale of a residential property change significantly.

From 6 April 2020, CGT is payable within 30 days of the completion of a residential property sale and a new form of tax return will need to be submitted by that date. Late submission will incur late filing penalties.

A provisional calculation of any chargeable gain will need to be prepared and the tax paid within that 30-day window. The gain will also need to be reported as normal on the annual self-assessment tax return and the tax paid offset against the actual year end liability.

This will affect taxpayers selling ‘buy to let’ investment properties and holiday lets. It will also affect homeowners selling their principal private residence if at any time during their period of ownership they have let their home or used it for business purposes. It may even affect people who have had a lodger.

Sale of UK Property – individuals who are not UK tax resident

If you are living outside the UK, you are still liable to pay UK Capital Gains Tax on profits made from the sale of UK land and buildings and you are required to file a tax return within 30 days of completion even if there is no tax due.

This rule does not just apply to the sale of residential property but to any type of land or buildings, again penalties will be charged for late returns and late tax payments.

Filing these returns will be the responsibility of the person selling the property, it will not be dealt with by the estate agent nor will it be dealt with by the solicitor dealing with the conveyancing. 

Clients considering UK property sales would be well advised to speak to the accountants who deal with their self-assessment tax returns in advance of the actual transaction.