Selling a property can have tax implications that are easy to overlook. If the property you are selling is not your main home, Capital Gains Tax (CGT) may be due – HM Revenue & Customs (HMRC) will then require this to be reported and paid within 60 days of completion.
CGT applies to the profit you make when you sell (or otherwise dispose of) an asset that has increased in value. It is the gain that is taxed, not the total amount you receive. While some assets are exempt, CGT commonly arises on the sale of buy-to-let properties, business premises and commercial property.
When do the 60-day rules apply?
If a disposal of UK residential property results in CGT being payable, you must submit an online CGT return and pay the tax due within 60 days of completion.
Your gain is usually calculated as the difference between what you paid for the property and what you receive when you sell it, taking into account any allowable costs and reliefs. CGT is only charged on gains that exceed your annual tax-free allowance – currently £3,000 and £1,500 for trusts.
When is reporting not required?
Not every property sale needs to be reported within 60 days. For example:
- Transfers made on a no-gain, no-loss basis, most commonly between spouses or civil partners, are excluded; and
- Reporting is not required where no CGT is payable, such as when private residence relief applies to your only or main home, or where the gain is fully covered by the CGT annual exemption.
Why timing matters
Although HMRC allow reasonable estimates to be used where final figures are not yet available, the 60-day deadline itself is strict. Missing it can result in penalties and interest, even where the tax due is relatively small.
It is important to stress it is the taxpayer’s responsibility to establish whether CGT is payable. Obtaining professional advice is key.
Considering CGT early in the disposal process can help avoid last-minute pressure and unexpected costs, giving you time to clarify your position before completion starts the 60-day countdown.
How M+A Partners can help
At M+A Partners, our tax specialists can confirm whether your property sale needs to be reported within 60 days, determine what CGT reliefs are available, calculate the gain and CGT due, and complete the online report on your behalf.
If you have any queries and would like to discuss further, do contact your normal M+A Partners’ adviser or get in touch with our team who will be happy to help.
