HMRC’s 60-Day Reporting Requirement for Residential Property Sales.

Have you recently sold a UK residential property? Then, you may have received a letter from HM Revenue & Customs (HMRC) reminding you of your 60-day reporting requirement. In this article, we’ll look at what this means and how it might impact your eventual income from the sale.

This ruling, introduced in October 2021, requires you to report the sale of any UK property that you own to HMRC and pay any Capital Gains Tax (CGT) due within 60 days of the completion date. The ruling applies to UK residents and non-residents alike.

The following categories of taxpayers are required to comply with the new ruling:

1. UK Residents
If you’re a UK resident, you must file and pay CGT on the disposal of residential property within 60 days when there is CGT payable.

2. Non – UK Residents
If you’re a non-UK resident, you must declare any disposals of UK residential property from 6 April 2020 regardless of whether any CGT is payable.

For UK residents, there are some situations where no CGT report is required, including when:

– you’re not liable for CGT for this disposal

– the gain is fully covered by Private Residence Relief (PPR)

– you have included the disposal in your self-assessment tax return within 60 days of completion

the gain is within the annual exemption limit (£6,000 for individuals and £3,000 for trusts for 2023-24 and £3,000 for individuals and £1,500 for trusts for 2024-25)

– the disposal of the property is subject to ‘no gain, no loss’. For example, the transfer is between spouses and cases where capital losses offset the gains.

There are two distinct ways to report your property sale.

1. Using HMRC’s Online System
You can use HMRC’s online calculator to determine if the gain needs to be reported within 60 days. If CGT is due, HMRC offers guidance on how to register and pay the tax through a CGT on UK Property Account. We are then able to request agent authorisation to act on your behalf and submit the report to HMRC. If you’re already in self-assessment, you must include the disposal on your SA tax return and show the tax that has been paid through the CGT system.

2. Self-Assessment Tax Return
If the property is sold shortly before the tax year end, the disposal can be reported directly on your self-assessment tax return without the requirement to complete a report through a CGT on UK Property Account. When reporting the CGT through your tax return, the tax return must be submitted within 60 days of completion.

1. Reporting deadline
The critical date is the property sale completion date. Ensure you report and pay any due CGT within the 60-day window.

2. Check Eligibility for Exemptions
Check if you qualify for any exemptions to avoid unnecessary reporting.

3. Self-Assessment Accuracy
If you’re reporting during the year, you may need to estimate figures to ensure it is submitted before the deadline. Ensure the estimates included are accurate to avoid later adjustments and potential interest charges.

Here at Dux Advisory, we have tax specialists among our staff who are well-placed to advise you on your obligations regarding CGT and to assist with the submissions to HMRC. Following the sale of your property, talk to us. We’re always ready to help.