Returns and Tax on UK Property Disposals

When it comes to selling your property, the last thing you are thinking about is the reporting obligations you need to make to HMRC.  However, as you may be aware there have been a number of changes in the treatment of UK property disposals, which will require the reporting obligation and payment of tax to be a high priority.

Since 6 April 2019, non-UK residents, have had to report and pay the Capital Gains Tax on the disposal of UK land and buildings, within 30 days of the date of conveyance.

However for UK residents, a disposal of UK property (which was not their main residence) was reportable on the individual’s self-assessment for the tax year the disposal took place i.e. disposal on 6 July 2018 would be reportable on the individual’s 2018/19 self-assessment, which needed to be submitted by 31 January 2020.  This left individuals with time to calculate their tax liability and the proceeds from the sale likely to be available to pay any Capital Gains Tax due.

This will now all change whereby HMRC has brought UK residents reporting of UK property disposals in line with non-UK residents.  Therefore, meaning that any UK property disposals made from 6 April 2020 by UK residents will need to be reported and the Capital Gains Tax paid within 30-days of the completion of the disposal.  There will be a separate reporting service that HMRC is currently developing for ‘Capital Gains tax on UK property’, which is separate to the self-assessment service.

There are a number of exceptions, whereby the UK property disposal does not need to be reported within the 30-day timeframe, however these are unique situations and the majority of individuals disposing of a UK property will now fall under the 30-day reporting obligation.

Naturally, this 30-day reporting window is likely to make it difficult for some individuals to provide exact figures for the Capital Gains report.  HMRC has accepted this and the legislation allows certain estimates and assumptions to be made with amendments to be made post submission of the report.

If you feel you may be affected by this change, or require further advice on the matter, please contact one of the Inspire Advisory team members on 01202 717867 or email info@inspire.uk.net

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