Statistics published by HMRC indicate that many taxpayers making disposals of UK residential property are still not comiing to terms with the UK's Capital Gains Tax (CGT) reporting regime and those who have missed filing and payment deadlines will now be subject to late filing penalties until they file their outstanding returns.
Capital Gains made on UK residential property disposals, including gains made by Non-Resident taxpayers of indirect disposals of interests in a 'UK property rich' entity must be declared on HMRC's online CGT disposal return, and the tax paid, using the Capital Gains Tax UK property disposal service, within:
- 60 days if the completion date was on or after 27 October 2021.
- 30 days if the completion date was between 6 April 2020 and 26 October 2021
Other Capital Gains and also reportable residential property gains are both reported under Self Assessment on or before 31 January following the year of assessment.
This means that there may well be up to two filing obligations and two tax payments, where a balancing payment is due under Self Assessment
Following a freedom of information request from accountants RSM, HMRC have confirmed that substantial numbers of UK Property Capital Gains Tax returns have been filed beyond their deadline. 25,300 returns were filed late in the 2020-21 tax year and 23,600 were filed late in 2021-22.
Late filing penalties can accrue very quickly:
| Lateness: | Penalty |
| Miss filing deadline | Fixed penalty: £100 per return |
| 3 months late | Daily penalty £10 per day for up to 90 days (max £900) |
| 6 months late | 5% of tax due or £300, if greater |
| 12 months late | 5% of tax due or £300, if greater, plus enahanced penalties if late filing is deliberate. |
Late payment penalties apply from 2022.
See Tax Penalties: Capital Gains Tax for more detail.
More useful guides on this topic
Grounds for appeal toolkit
What grounds are there to appeal a tax penalty? How should you word a tax appeal? Can you appeal HMRC errors? What is a reasonable excuse?
How to appeal a tax penalty
What are the steps in making an appeal? What should your appeal cover? What does recent case law say on this topic?
External links
Taxpayers face more penalties as property disposal must be reported twice
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