Disposing of Property – New Capital Gains Tax Rules apply

New rules are now in place for when an individual or trust sells a residential property.

Under these rules you will be required to report the gain and pay any Capital Gains Tax owed within 30 days of the completion date of the sale.

The report is called a “Residential Property Return” and has to be submitted online to HMRC. Where properties are held in joint names, each individual owner has to submit a report.

If you don’t tell HMRC about any Capital Gains Tax within 30 days of completion, you may be sent a penalty as well as having to pay interest on what you owe.

How to make the Residential Property Return:

You must register yourselves with HMRC online services account and both submit and pay through the CGT UK Property Services Portal. As agents, we can make a report on your behalf, however we still need you to register for a HMRC online account and send an authorisation link to us.

Exceptions to the new rules:

There are some exceptions, so a report will not need to be made when:

  • The property is covered by Principle Private Residence (PPR relief) throughout the period of ownership
  • If you sold the property for a loss
  • If the gain is within your annual exemption
  • The property is outside of the UK
  • The sale was made to a spouse or civil partner.

If you would like to discuss any of this further then please contact me at alex.frow@torrwaterfield.co.uk.

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