If you plan to sell a second home or a property that you have not used as your main home for the entire period of ownership, capital gains tax (CGT) may be due.

When Does CGT Need To Be Declared And Paid?

Any CGT on sales of UK homes completed after the 6th April 2020 must be declared and paid within 30 days of the deal’s completion date. Nevertheless, it has come to light that some conveyancing solicitors and estate agents are either unaware of this requirement or fail to inform their client that the reporting period has been shortened. This means that particular care will now be necessary. Even if you are a non-resident seller, you must still declare the disposal of any UK property within the 30-day timeframe.

Man Doing Paperwork At Home

How Can CGT Be Declared?

The CGT declaration must be completed through an online UK property account; this is a separate system from the annual self-assessment tax returns. When you report the gain, you will be issued a reference number by HMRC, and it is this that must be used when paying your tax. If your payment is late, the HMRC computer will automatically issue a penalty.

As a taxpayer, you will also need to report the same gain in your tax return for the year, declaring how much CGT you have already paid using your UK property account. If you have paid too much CGT, you must amend your UK property account in order to reclaim the overpayment. The overpayment cannot be offset against your income tax liability for 2020-21; this is payable on the 31st July 2021, with any balance due by the 31st January 2022.

If you have sold a UK home in the last 14 months and this has not already been reported to HMRC, please contact our team without delay.