Get your Capital Gains statements done within 60 days of selling a residential property

His Majesties Revenue and Customs have confirmed that any tax-payers who have not informed them within 60 days of selling a residential property that they must do so now. Even if they have included this on their self-assessment forms.

Since April 2020, anyone who is a UK resident and has sold residential property and has a capital gain i.e; the difference between what was paid for the property originally and what it was sold for must calculate and pay any tax due within 60 days of the event. If you complete a self-assessment tax return you also have to report it on your return.

This is a major change to the rules and timing of when you need to report any Capital Gains on sales of residential properties.

In general, completing and detailing any Capital Gains Tax on a self-assessment return is not enough. You now have to report the sale of any residential property within 60 days of the sale. The only occurrence when this does not apply is when the return is due to be submitted within 60 days. For example, if you exchange contracts in April 2022 with completion by the end of June 2022 followed by a tax return by the end of June then that would work. In any other case, the property return should be submitted before the self-assessment return. This rule was only formally confirmed by the HMRC in April 2022.

Unfortunately, this rule change came too late for anyone who hadn’t got things in order for the 2020/21 tax year, so they will have to complete a PPDCGT form and submit it to the revenue. The same rule will apply for any future events where a tax return is completed without the declaration of the sale being completed before the tax return. The PPDCGT is a paper form which seems a strange solution given that HMRC is insisting on as many IXBRL submissions as possible.

What’s the situation if you fail to submit the correct information within the timeline?
The current rules indicate that there is an immediate fine of £100 for late filing, then 5% or £300 for being 6 months late, and then another £300 if the property statement is 12 months late.

The HMRC are unclear about their proposed approach to penalties. Whatever happens, tax payers should be treated fairly, if they have been fined then it should be possible to appeal this and recover the fine because the HMRC is not clear about the current situation.

If you find yourself in this situation or are concerned about it please contact us for a free consultation.