Do you have to declare capital gains on property within 60 days?

by | Jun 10, 2022

Selling your home or another property is a drawn-out process with many moving parts, especially when you have to consider capital gains tax (CGT).

There have been many changes made to the way you pay CGT over the last year, so knowing how and when to make these payments is very important, so you don’t fall foul from HMRC.

In this post, we will give you the information you need to ensure you’re making your CGT payments on time and accurately.

When you need to pay

If you’ve sold a property and the completion date was on or after 27 October 2021 you’ve 60 days to report and pay any CGT to HMRC.

The deadline has been extended as any completion dates on the sale of properties between 6 April 2020 and 26 October 2021 originally had 30 days to declare.

This now means any prospective sellers have even more time to make their gains known to HMRC, giving them the chance to reduce the risk of any interest or penalties issued with late registration.

The following UK tax residents fall within the 60 day CGT rules:

  • Individuals
  • Trustees
  • Personal representatives
  • People in partnerships and limited liability partnerships
  • Joint owners of a property

The 60-day rule also depends on the type of property being sold. For example, rental properties and holiday homes, and property the owner has never lived in are all subject to the 60-day return rules.

Calculating your gain

How much CGT you pay will depend on how you’ve used the property being sold.

You won’t need to pay CGT when you sell or dispose of your property if:

  • You have one home and have lived in it as your main home for the whole time you’ve owned it
  • You have not let any part of it out to a lodger
  • You didn’t buy it just to make a gain
  • You have not used any part of the house for business purposes
  • If the grounds are less than 5,000 square metres

You’ll automatically get a private residence relief and will not have to pay any tax if this is the case.

A gains calculator is available on the Government website for people who are likely to have to pay CGT on their sold property.

How to report your gains

For the time being, the best way to report any gains to HMRC is through the Government Gateway website. If you don’t already have one, you’ll need to set up an account ID and password.

Once this step is completed you’ll be able to sign in at any time to report capital gains tax on your property or check any existing returns. Your accountant can also do this on your behalf, saving you the unnecessary concern and time.

To report any capital gains you need to have calculations for each capital gain or loss being reported as well as the details of how much you bought and sold the property for.

Any dates of ownership will be required when reporting for your CGT, as well as any other relevant details relating to the cost of disposing the property and any tax reliefs you may be entitled to.

What you can do

As a property owner, you’ll have lots to deal with when it comes to selling said property. That’s why ABG is here, to help you deal with your CGT obligations.

If you wish to speak to a member of our team you can contact us on 020 7330 0000 or click here.

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