If you make a capital gain by selling a residential property in the UK, you need to report that disposal to HMRC twice, on:
- A UK Property Return (normally online) within 60 days of the completion date; and
- A Self-assessment tax return (SATR) by 31 January after 5 April following the exchange date.
These two systems of Capital Gains Tax (CGT) reporting are completely separate. Your best estimate of the CGT due on the sale must also be paid within 60 days of the completion date. When you complete your SATR you must submit all the same information, plus details of any other gains or losses you have made in that same tax year. You may then have extra CGT to pay or due a refund. Note, however, that if you have no other income or gains to report for the year, you will not need to file a SATR if you have submitted a Property Return already.
If you have not completed the UK Property Return to report your gain by the time your annual SATR is due, you must complete the UK Property Return first. The HMRC system will not allow you to submit the UK Property Return online after your SA return has been accepted, so you will have to submit the UK Property Return on paper – which is a pain. There will also be penalties to pay for submitting a late UK Property Return.
If you get an error message when trying to access the UK Property Return, it may be because your home address is not correctly recorded within HMRC systems. Check your online personal tax account has the correct postcode entered in the right field.
We are here to help you navigate what can sometimes seem to be a crazy tax system and to help you avoid tax penalties.
