If you are selling a residential property other than your private residence, then you must report the sale to HMRC within 30 days, or you will have to pay penalties.
New rules introduced from April 2021 mean that anyone selling a residential property, where there is capital gains tax to pay, will have to report that sale and pay the tax within 30 days of conveyance. Failure to meet this deadline will mean that HMRC will charge late filing penalties of £100 plus interest on any tax paid late.
Whilst the legislation is quite clear, HMRC advice is not. The legislation only applies where a charge to capital gains tax applies, which means, for example, selling your principal private residence (which is exempt) does not need to be reported. Similarly, if the gain is wholly within your annual exemption (currently £12,300), then it does not need to be reported. However, any other residential property sales resulting in a gain must be reported.
In our experience, conveyancing solicitors do not always warn their clients about this HMRC requirement.
It is crucial if you are selling a property that you have not lived in for the entire period that you have owned it, that you contact us as soon as possible to ensure that you meet your obligations within the 30-day deadline. We can prepare the calculations and submit the necessary Returns to HMRC.
We are now able to provide this as a one-off service if you are not an existing client. Please get in touch as soon as possible to make sure that you meet your obligations and avoid any tax penalties.