I have sold a residential property but why do I have to report this to HMRC?

It sounds as though you last sold a residential property and exchanged contracts before 6th April 2020. You would have had until the 31st January following the end of the tax year of the sale to file your self-assessment tax return and pay any Capital Gains Tax (CGT). For a sale of a residential property in April 2019, you would have had until the end of January 2021 to submit your return and pay the CGT.

The rules have changed, so that where contracts were exchanged on or after 27th October 2021, you now have 60 days from the completion date to report the sale on a new online return and pay the CGT.

As soon as you consider selling a residential property, it is therefore important to let your accountant know about the proposed sale. 60 days is not long to get the information together for the initial purchase, particularly if it was some time ago. Since a return is only required if there is CGT due (unless you are not resident in the UK), the first step is for your accountant to assess whether there is actually any CGT due.

If there is CGT due, there is a quick authorisation process to go through and then your accountant will be able to complete the online return for your approval, before submitting it to HMRC to avoid an automatic £100 late filing penalty, and advising you on how much CGT to pay, and how you go about doing this.

Special rules apply for non-UK residents and we’d recommend taking advice prior to making any disposals.

If you would like to discuss this further please contact us on 01423 871 870 or use our simple online contact form to arrange a free initial consultation.

Date published 20 Aug 2021 | Last updated 3 May 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.