UK land and property disposals and Capital Gains Tax
Capital Gains Tax is a complex topic at the best of times. When it comes to UK land and property disposals it is even more so. In our latest feature, Consilium’s Personal Tax Director Joyce Fleming takes us through the intricacies of Capital Gains Tax and UK land and property disposals.
When you normally complete a Self-Assessment tax return, any capital gains are usually reported using the capital gains pages. These pages apply if either:
- your gains are more than the annual exempt amount for the year (£6,000 for 2023/24); or
- if your sales proceeds are more than £50,000 for 2023/24, even if your gains are less than the annual exempt amount.
However, you do not have to complete the capital gains pages if your only disposal is of your UK home and private residence relief applies on the full amount of the gain.
When you make a UK land and property disposal, you may also need to report the disposal of the property to HMRC on a separate return and pay Capital Gains Tax (CGT) within 60 days for disposals completed from 27 October 2021.
UK land and property disposals: reporting and payment for residents
For disposals on or after 27 October 2021, UK residents disposing of UK residential property should report it within 60 days, unless there is no capital gains tax to pay. Any tax due on the gain should also be paid within 60 days. Please note that you are required to report these disposals within 60 days even if you intend to file a self-assessment tax return for that year at some later point.
UK land and property disposals: reporting and payment for non-residents
For non-residents, disposal of UK land and property from 27 October 2021 should be reported within 60 days, even if there is no capital gains tax to pay. A reporting requirement applies to disposals of all UK land and property by non-residents, not just residential property.
If there is any capital gains tax to pay, then for disposals on or 27 October 2021 it was also due within 60 days in all cases (previously it was possible to defer payment until 31 January following the end of the tax year if you filed a Self-Assessment tax return).
Therefore, the current tax position for UK land and property disposals can be summarised below:
|UK tax residence status||Asset type||Required to report within 60 days?||Deadline for paying tax|
|Resident||UK residential property||Only if there is tax to pay||60 days|
|Resident||Anything other than UK residential property||No||31 January following the end of the tax year|
|Non-resident||UK land and property||Yes||60 days*|
|Non-resident||Anything other than UK land and property||No||n/a|
*Capital Gains Tax for non-residents may not apply to the whole gain. If not, you may have to pay more tax if you return to the UK after a period of temporary non-residence.
How do I report capital gains to HMRC if I don’t usually file a self-assessment tax return?
For UK Residents
This depends on whether you have made a disposal of property which requires you to complete a CGT return within 60 days of completion of the disposal and any other capital disposals you have made in the tax year.
There are various reporting options which include, advising HMRC by letter, using the HMRC “Real-Time” Capital Gains Tax Service or registering for a self-assessment tax return. The reporting requirements will depend on your specific circumstances.
Which types of disposals of UK land or property required a return within 60 days?
If you are required to complete a return within 60 days of completion of any UK land and property disposals, irrespective of whether or not you are a UK resident, you should use HMRC’s report and pay CGT on UK property service for disposals on or after 27 October 2021. It is possible to complete this on paper if you are unable to use the digital service. This is not optional – you must do it if you fall within the criteria for making a 60-day report.
Again, if you use this service to report your gain, you will not need to file a self-assessment tax return for that year assuming you have no other reason to do so. However, if you do need to file a self-assessment tax return then you will need to report the gain again on this return.
We can summarise the reporting methods for disposals on or after 27 October 2021 as follows:
|Required to report the disposal within 60 days |
(Table A above)
|HMRCs real-time Capital Gains Tax service||HMRCs real-time report and pay CGT on UK property service||Self-assessment tax return|
|Yes||n/a||Required in all cases||Only required if issues with a return by HMRC or otherwise meet self-assessment criteria|
|No||Optional||n/a||Required if gain not reported to HMRC by letter or if issued with a return by HMRC or otherwise meets self-assessment criteria|
There are other complexities within the reporting requirements for Capital Gains Tax, so it is always best to check the position with your tax adviser prior to selling any property. The Personal Tax team and I here at Consilium Chartered Accountants are available to discuss any tax queries around UK land and property disposals or Capital Gains Tax in general.
To arrange a confidential virtual or in-person meeting please contact Joyce Fleming.