Capital gains tax and UK residential property

The Government’s intention is to accelerate the payment of capital gains tax on residential property.

At present if you are resident in the UK and you sell a residential property you should consider whether there is a capital gain to report to HMRC. If the gain exceeds the tax-free amount (currently £11,700) or total proceeds are more than four times the tax-free amount you should report it. An exception to this is where the property is your main home for tax purposes and the total gain qualifies for ‘private residence relief’.

Not in the Self Assessment System
You have a choice in how to report the gain. You can register for Self Assessment by 5 October following the end of the tax year of disposal and pay the tax via Self Assessment by 31 January following the end of the tax year.

Or

Report the capital gain using the real time service. This approach might be worth considering if the property disposal is the only reason you would register for Self Assessment. Using the real time service, you must report the capital gain by 31 December following the end of the tax year in which the capital gain took place. You will need a Government Gateway account to do this and will have to submit your calculation of the gain electronically. Tax is payable by 31 January following the end of the tax year but HMRC will issue a reference number so you can pay the tax earlier if you choose to. This approach keeps you out of Self Assessment and allows you to finalise matters relating to the property disposal sooner than might be the case via Self Assessment.

Within The Self Assessment System
You must include the gain on your Self Assessment Return and any tax payable must be paid by 31 January following the end of the tax year. You can use the real time service, but you will still have to report the gain on your Self Assessment Return.

Non-UK Residents
For non-UK residents, capital gains on UK residential property are reportable on an online non-resident capital gains return within 30 days of completion of the sale. This can be found at https://www.tax.service.gov.uk/shortforms/form/NRCGT_Return. Tax has to be paid within30 days if you are not within Self Assessment. If within Self Assessment you can pay by 31 January following the tax year of sale via your Self Assessment account. From April 2019 it will apply to all property transactions made by a non-UK resident (including commercial property).
Further changes are expected from April 2020. A payment on account will be required within 30 days of completion of the disposal transaction for all UK residential property transactions giving rise to a chargeable gain. For more complicated calculations it may be necessary to give reasonable estimates of valuations, relievable expenditure, apportionments and reliefs available.