Understanding the 60-day rule for property and Capital Gains Tax (CGT)

Changes to the reporting of sales of UK residential properties to HM Revenue & Customs (HMRC) were introduced in April 2020.

The result was that you were required to report and pay any 2Capital Gains Tax (CGT) due within 60 days of selling the UK property or land if the completion date was on or after 27 October 2021.

Previously the deadline for reporting and making payment of any CGT was 30 days.

Reporting property disposals

Who will need to submit the CGT Return within 60 days?

·        Individual taxpayers

·        Joint owners of the residential property

·        Partners in general partnership and limited liability partnership (LLP)

·        Trustees of a trust

What types of property sales fall within the scope of a 60-day CGT Return?

·        Buy-to-let residential property

·        Holiday homes or second home

·        Residential properties you partly lived as a primary residence or never lived as your primary residence

·        House of multiple occupations

What types of transactions fall within the scope of the 60-day CGT return?

Whether the transaction is a sale, a gift, a transfer of deed or declaration or any other transfer means it falls within the scope.

HMRC will impose a late filing penalty and charge interest if you miss the 60 days from the date of conveyance to report your disposal and pay any tax due.

If you miss the deadline by:

·        Up to six months, you will get a penalty of £100

·        More than six months, a further penalty of £300 or five per cent of any tax due, whichever is greater

·        More than 12 months, a further penalty of £300 or five per cent of any tax due, whichever is greater

Need help understanding and complying with the 60-day rule? Call us today.

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