The Association of Taxation Technicians (ATT) welcomes the Chancellor’s move to increase the deadline for reporting capital gains tax on residential property disposals from 30 days to 60 days which complete from today (27 October 2021).1
Since April 2020, UK tax residents who dispose (sell or gift) UK residential property and make a capital gain have been required to calculate, report and pay their tax within 30 days of completion of the sale. This requirement primarily (but not exclusively) affects landlords, second home owners, divorcing couples and trusts and estates. UK tax residents selling property where there is no capital gains tax to pay - for example where they are selling a property they have lived in as their main home throughout their ownership - are generally not affected.
The ATT and others gave evidence to the Office of Tax Simplification (OTS)2 last year that this 30-day time limit was too short to deal with all the necessary compliance work required. The OTS highlighted that between 6 April 2020 and 6 January 2021, one third of these returns were filed late – and that figure could be higher still given that not everyone is necessarily aware of the new measures.
Michael Steed, Co-Chair of the ATT’s Technical Steering Group, said:
“The very short time-limit for reporting disposals of residential property has proved really challenging for those affected and we welcome the Government’s extension to a 60-day period. A large part of the problem is that many taxpayers are simply not aware of the new requirements and with such a short deadline, it was very easy to miss.
“The OTS also called for more work to be done to make people aware of these reporting rules and we would still like to see the Government do more to alert landlords, second home owners and others to these obligations.”
Similar reporting rules exist for non-UK tax residents disposing of UK land (including shares in ‘property rich’ companies who hold UK land), who will also be given the longer 60 days’ period to comply.
Notes for editors
1. HMRC has confirmed to us that the longer time period will only apply to taxpayers who complete their disposals on or after 27 October 2021. Disposals completed before that date will still need to meet the 30-day requirement.
2. The ATT supplied evidence to the OTS CGT review suggesting a 60 to 90-day period would be more appropriate. The OTS’s recommendation of 60 days is included in their second report: Capital Gains Tax: Simplifying practical, technical and administrative issues.
3. The ATT has written a Users guide on the UK Property Reporting service to assist its members in supporting taxpayers.