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Capital Gains Tax on Residential Property

When disposing of a property that is not your home, for example, a buy-to-let property or inherited property which you went on to let out, you must declare this to HMRC through a Capital Gains Tax on Residential Property account.

When disposing of land, this is subject to capital gains tax, however it would not be taxed as a residential property and hence does not need a Capital Gains Tax on Residential Property account.

Inherited properties potentially suffer inheritance tax when they are first inherited but will be subject to Capital Gains Tax when the property is later sold. If this has not been used as your main residence this will need to be declared through the residential property account. You do not need to declare the capital gain or pay the tax when you sell your main home.

The deadlines to declare the Capital Gains Tax on Residential Properties are as follows:

  • If the completion date was between 6th April 2020 and 26th October 2021, you have 30 days to submit
  • If the completion date was on or after 27th October 2021, you have 60 days to submit

HMRC have not advertised this change very effectively, therefore you might not have submitted your Capital Gains Tax on Residential Properties within the deadline. HMRC advises that there might be a penalty, however we are yet to see one.

If you would like us to complete this Capital Gains Tax return for you; we are very experienced in submitting these for clients.  Please contact us for further information..

HMRC’s guidance can be found on their website:

https://www.tax.service.gov.uk/capital-gains-tax-uk-property/start/report-pay-capital-gains-tax-uk-property