60-day window to report residential property gains

If you realise a chargeable gain on a UK residential property, you now have 60 days rather than 30 days in which to tell HMRC about the gain and make a payment on account of the tax that is due.

A chargeable gain may arise on the sale of a residential property if that property has not been occupied as your only or main home throughout the period that you have owned it. This may be the case if you sell an investment property, such as a buy-to-let or a holiday let, or a second home.

Pay the tax

You must also pay tax on account of the gain within 60 days of completion. Interest is charged if the tax is paid late.

The amount you must pay is the best estimate of the tax due at the date of sale. Losses realised previously in the tax year or brought forward can be taken into account, as can the annual exempt amount, if this has not been used already.

Example

Marjorie sells her holiday cottage. Completion is on 28 January 2022. She realises a gain of £60,000.

Previously in the 2021/22 tax year, she sold some shares, realising a loss of £4,000. She has made no other disposals in 2021/22

Marjorie is a higher rate taxpayer.

She can set the loss earlier in the year and her annual exempt amount for 2021/22 of £12,300 against the gain, reducing it to £43,700 (£60,000 – £4,000 – £12,300).

She must therefore report the gain and make a tax payment of £12,236 (£43,700 @ 28%) by 29 March 2022 – 60 days from the completion date.

As the end of the year there may be some adjustment after the tax return is filed, and it is possible that a repayment may arise if losses are realised on later disposals in the tax year.