UK Residential Property
Where a residential property has been disposed of after 6th April 2020, gains must be declared on HMRC’s online CGT disposal return (UKPR) and any tax due paid using the Capital Gains Tax UK property disposal service within :
· 60 days where the completion date was after 27th October 2021
· 30 days if the completion date was between 6th April 2020 and 26th October 2021
This is likely to affect
- A property not used as a main home
- A holiday home
- A property which is let out
- A property that has been inherited and not used as a main home
However the following transactionsare not reportable this way :
- Sale of a main residence where the gain is wholly covered by principal private residence relief (PPR)
- Where a legally binding contract for the sale was made before 6 April 2020
- If the disposal was made to a spouse or civil partner (nil gain, nil loss treatment)
- When the gains (including any other chargeable residential property gains in the same tax year) are within your tax-free allowance (Annual Exempt Amount)
- If, after deducting all allowable costs, you made a loss on the disposal
- If the property is situated outside the UK
- Property developments where profits are charged to income tax
Gains before 6th April 2020 only need to be reported to HMRC if the gain exceeds the Annual Exemption for the year the gain was made, and the total proceeds are more than 4 times that Annual Exemption. The Annual Exemption for 2021/22 and 2022/23 is £12,300 per individual (£24,600 for a couple). These gains can either be reported on the annual self-assessment or using HMRC’s CGT service
All other capital gains do not need to be reported in this way and should be reported on the capital gains pages of the annual self-assessment return.
For tax-payers that are already in self-assessment, reportable gains will additionally need to be included in the annual self-assessment return (as well as filing a UKPR). The UKPR however must be filed before filling the self-assessment return as disposals cannot be reported on a UKPR after a self-assessment has been filed (the only exception being for gains that occur within 60 days of a self-assessment return being filed).
For tax-payers not in self-assessment, there is no need to register for self-assessment to report a reportable gain. However where a gain has arisen on which tax is payable, a UKPR needs to be completed in the same way as above and you may need to setup a government gateway for the purpose. You do not need to report a gain on which no tax is payable.
The following diagram summarises the reporting requirements after 6th April 2020
Using an Agent
Where a tax-payer wishes to appoint an agent to report their gain, they may do so provided the agent has been specifically authorised to do so.The agent will normally seek authorisation through their agent services account with the process operating as follows :-
· The client must first set up a Capital Gains Tax on a UK property account. They will be issued with a 15 digit reference number.
· The client then passes their reference number and postcode to their agent who can request authorisation to manage the client'sCGT property account. They do this through their ASA.
· The client will receive a link to click on to approve the agent to act. Once approved, the agent can prepare and file the return for the client.
· Once the return is filed the agent and client should receive an email from HMRC with instructions for making payment. It appears that payment cannot be made simultaneously with the filing of the return as a reference is required.
· Anyone who cannot authorise their agent online and does not wish to file a paper return can go through a telephone authorisation process with HMRC instead
From April 2019, all individuals who are not UK residents must report all disposals of UK property to HMRC regardless of whether any tax is payable and even if there is a loss on disposal. Any tax due must be paid within 60 days of completion.