Capital Gains on UK Residential Property Disposals now due within 30 days

29th June 2020

Payment and reporting terms in respect of any capital gains on UK residential property disposals have changed as of 6th April 2020 for UK resident taxpayers. From now on a return will usually need to be submitted to HMRC within 30 days of the completion of the sale. Read on to find out your obligations in this area.

capital gains on UK residential property disposals

What changes have been made to Capital Gains on UK residential property disposals?

For UK resident taxpayers, payment payment of capital gains tax liabilities arising on the sale of a UK residential property disposal has historically been due on 31st January following the tax year of the property sale, with details being reported in the self-assessment tax return.

From 6th April 2020 the requirements changed, with all payments and reporting now due within 30 days of completion of the sale, in what is known as a ‘UK Land Return’.  Applicable to both individuals and trusts, the following requirements are now in place following disposal of a UK Residential Property by a UK resident taxpayer:

  • Within 30 days of completion of sale you must submit a return to HMRC, with details of the disposal and a calculation of any capital gains accruing
  • If you ordinarily complete a self-assessment tax return, you will need to provide the same information regarding your property disposal at that time (usually 31st January). Taxpayers will no longer need to complete a self-assessment return if the only filing criteria is the reporting of gains related to the residential property disposal
  • Any Capital Gains Tax due on the disposal is payable to HMRC within 30 days of completion of sale. This is effectively a “payment on account” for your end of year tax liabilities
  • The capital gain should be calculated as though the disposal had occurred at the end of the tax year. The gain should then be used to determine the tax liability arising on the disposal. The calculation can be complex and is impacted by the taxpayer’s other taxable income within the year, as well as any other capital disposals made in the same tax year and, in some cases, previous tax years
  • HMRC accepts that the initial calculation may be an “estimate” that could result in a future refund or an additional tax liability once the self-assessment tax return has been completed. The taxpayer will be required to pay any interest on the difference as well as any underpayment penalties should the final tax liability be higher
  • If the property is held by more than one taxpayer or in a partnership then each party must submit a UK Land Return and pay the tax for their proportion of the sale
  • If more than one property is disposed of on the same completion date then they may be submitted in the same UK Land Return

What happens if I don’t comply?

Late payment or filing will lead to penalties being imposed by HMRC. The penalties start at £100 and can be as much as 5% of the tax due once over 6 months late. In addition, late payment interest will accrue from the payment due date until the liablity is settled in full.

This ruling is applicable for any sales from 6th April 2020 and so you should make your tax adviser/accountant aware of any residential property disposals you have made since this date if you have not already done so.

Exemptions to the Capital Gains UK property disposal rules

The new legislation covers capital gains arising in respect of the disposal of residential properties including, but not limited to, holiday homes, second homes, those with large grounds and buy- to-lets. The following disposals are exempt:

  • Any disposal of commercial property or property not located within the UK
  • Any disposal where no capital gains are incurred due to annual exemptions, relief (e.g. PPR relief) or capital losses brought forward. PPR (Principal Private Residence Relief) is a relief that protects an individual from capital gains liabilities when selling their main home if they have used the property as their only or main home for the period they have owned it
  • Any sales that did not lead to a gain or loss, such as if a property were transferred between spouses
  • If a property has both commercial and residential parts, then the UK Land Return need only report the disposal of the residential element of the property
  • Any charity or pension scheme disposals
  • Grant of a lease for no premium to an unconnected party under an arm’s-length bargain

Non-UK residents

The rules for non-UK residents have not changed.  Any disposals for non-UK residents of residential property have been subject to the 30-day rule since 6th April 2015.

What should you do now?

You should ensure that the gains on any residential properties that you have sold since 6th April 2020 have been properly reported and a payment submitted to HMRC.  Seek professional assessment of the accuracy of calculations – the final liability will depend on other income influences, annual exemptions and reliefs (such as PPR relief) within the tax year and, although it is acknowledged that the initial amount will be an estimate only, you should ensure you are as accurate as possible at the point of submission to avoid heavy interest or penalty payments at the end of the year.  Contact your accountant or tax adviser as soon as possible to help with this and to plan in advance for any corrections that may be due at the end of the tax year.

We can help

At TTR Barnes we understand the legislation governing Capital Gains Tax related to UK residential property disposal.  Talk to one of our experts in the tax team today to ensure you are compliant and tax-efficient.  


All information correct at time of going to print/live and on the best knowledge and understanding of the author at the time.  This article is for general information only and does not constitute financial advice or recommendations for individual circumstances.  No responsibility is taken for any actions taken on the base of the information within this article.


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