Capital Gains Tax – 60-day reporting for property

The rules for reporting and paying Capital Gains Tax on the sale of UK residential property have been tightened significantly. Following a recent extension, taxpayers now have 60 days from the date of completion to file a return and pay the tax due.

This applies to any property that is not your primary residence, such as a buy-to-let property or a second home. The 60-day window is still relatively short, so it is essential to gather all the necessary information, including the original purchase price and details of any capital improvements, as soon as the property is put on the market.

Who needs to report?

The 60-day reporting requirement applies to UK residents selling a UK residential property where a Capital Gains Tax liability arises. If the gain is fully covered by your Private Residence Relief (because the property was your main home for the entire period of ownership) or your annual exempt amount, you do not need to file a 60-day return. Non-UK residents must report all sales of UK property, regardless of whether a tax liability arises.

How to file the return

The return must be filed online using HMRC's 'Capital Gains Tax on UK property' service. To do this, you will need a Government Gateway user ID and password. You must calculate the estimated CGT due, taking into account your expected income for the year (which determines whether you pay the 18% or 28% rate) and any available annual exempt amount. The tax must be paid by the same 60-day deadline.

Interaction with Self Assessment

Filing a 60-day return does not replace your annual Self Assessment tax return. You must still declare the disposal and the CGT paid on your annual return. When you complete your Self Assessment, the exact CGT liability will be calculated based on your final income for the year. Any overpayment of CGT made on the 60-day return will be refunded, or any underpayment will be collected alongside your other tax liabilities.