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Do you own property personally? If so you need to read this…..


If you own property there are a number of tax implications which you need to be aware of.


Timing of Capital Gains Tax Reporting

Since 6 April 2020, any gain on a residential property where CGT is due must be reported and the CGT paid within 60 days of the sale by using the online property disposal return . For disposals before 27 October 2021, this 60 day time limit was 30 days.

How the gain is calculated is dependent on whether you are a UK tax Resident or not - this is outside the scope of this Blog.

In a recent update, HMRC has confirmed that declaring a capital gain on the disposal of a UK residential property under Self Assessment does not remove the requirement to file a 60-day property disposal return.

Where an online return has not been filed but the gain has been declared under Self Assessment, a late property disposal return must still be filed and this must be done by way of a paper form. Currently the paper form is not available online and can only be obtained by calling the HMRC helpline.

Since the 60-day return will be late, penalties and interest will be due. Taxpayers who are in this position should file the paper return as soon as possible to prevent further penalty charges.

The only exception is where the gain is declared under Self Assessment first because the Self Assessment return is filed before the 60-day deadline. In this case no online property disposal return is required. In reality, this is likely to apply in a limited number of circumstances.


Timing of Capital Gains Tax Reporting

Since 6 April 2020, the following has been the case:

  • Interest relief on loans taken out to purchase rental property is only available at 20%, regardless of whether you pay tax at the higher rate or not.
    Where a house has been your only or main residence at sometime, certain reliefs are available on the sale of the property for periods when you do not live there - the effect of these is to reduce any CGT that may be payable on the sale. The current rules are as follows:
    • Final Period Exemption
      The idea around this exemption is to provide taxpayers with a “deemed occupancy” at the end of their ownership where there was a delay in the sale process (and they had moved into their new home). Without this exemption, CGT would have been payable on some of the gain.

      At one time this period was 36 months, but it is now only 9 months. As more and more people now own second homes, HMRC now deem that this exemption is open to abuse - hence the relative short period of time

    • Lettings Relief
      Once a fairly generous relief, this relief is only available now if the house is rented out when the owner still lives there.


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