24th November 2021
Buy-to-let landlords and second homeowners have twice the amount of time to report and pay capital gains tax after selling a residential property in the UK.
The deadline to report and pay capital gains tax after completing the sale of additional UK residential property is now 60 days - up from 30 days.
The change came into immediate effect after the announcement in the recent Autumn Budget, and applies to completions made on or after 27 October 2021.
This extension also applies to non-UK residents disposing of any type of property in the UK, whether directly or indirectly owned.
When mixed-use property is disposed of, the 60-day payment window will apply only to the residential element of the property gain.
The extension implements a specific recommendation contained in a report published by the Office for Tax Simplification (OTS) in May 2021.
That report claimed many taxpayers only found out about their capital gains tax obligations after they had completed the sale of their property.
This left around 150,000 people with insufficient time to consider if they had a gain, and even less time for the 85,000 people who had to report it.
Between 6 April 2020 and 6 January 2021, one in three UK property tax returns were filed later than the 30-day window according to HMRC.
Michael Steed, co-chair of the Association of Taxation Technicians' technical steering group, said:
"The very short time limit for reporting disposals of residential property has proved really challenging for those affected.
"A large part of the problem is that many taxpayers are simply not aware of the new requirements and with such a short deadline, it was very easy to miss.
"The OTS also called for more work to be done to make people aware of these reporting rules and we would still like to see the Government do more to alert landlords, second home-owners, and others to these obligations."
Talk to us about your reporting obligations.