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Andrew Knott, standing in front of the Bevan Buckland LLP logo

Andrew Knott, Senior Executive at Bevan Buckland LLP

Wales’ largest independent accountancy firm, Bevan Buckland LLP, is urging individuals not to miss their deadline to report to HMRC after selling a property.

The deadline to report and pay capital gains tax after completing the sale of UK residential property is now 60 days, which has doubled from the 30 day limit originally set by HMRC. However, amid the activity of selling or moving house, the deadline can be overlooked and depending upon the time elapsed, penalties for missing the filing date can be up to £700 or, if greater, £100 plus a percentage of the tax due.

The change to the reporting deadline came into immediate effect after the Autumn Budget and it applies to completions on the property made on or after 27 October 2021.

Andrew Knott, Senior Executive at Bevan Buckland LLP who is based at the firm’s new Cowbridge office said: “Post lockdown, there has been quite a lot of activity in the residential property market, with the Land Transaction Tax holiday having a real impact upon the speed and urgency of transactions.  COVID has had many other impacts all along the property chain, with increased caseloads, home-working and, issues around face-to-face viewings, so it can be easy for sellers to overlook this very important deadline.  The previous time limit for reporting disposals of the residential property proved really challenging, so the Government’s extension to a 60-day period for both UK and non-UK residents are welcome.”   

Andrew adds: “Before April 2020, any capital gains made on the disposal of UK residential property were due to be disclosed to HMRC on a self-assessment tax return, with the capital gains tax due for payment 10 months after the tax year.  On 6 April 2020, the 30-day payment window was introduced, but many tax-payers are still unaware of those changes.  The new rules affected any homeowners when the property sold has not been their main residence throughout the period of ownership.” 

The Office for Tax Simplification (OTS) highlighted a common issue with the 30-day deadline in that many taxpayers only found out about their capital gains tax obligations after they had completed the sale of their property. This left around 150,000 people with insufficient time to consider if they had a gain, and less time for the estimated 85,000 people who had to notify HMRC.  It is thought that between 6 April 2020 and 6 January 2021, one in three UK property tax returns were filed later than the original 30-day reporting deadline.

Andrew added: “This is an issue that has been catching people out and it is important that property owners seek financial advice from a professional in good time so they can advise you on whether you are likely to need to report gains to HMRC. When calculating if any tax is due, consideration also needs to be given to any other disposals made in the year and any carried forward capital losses.”  It was also noted that “the rules for non-UK residents are different with a non-residential and mixed-use property also falling within the reporting regime and therefore professional advice should also always be sought if a non-UK individual makes a UK property disposal”.

Bevan Buckland LLP is the largest independent accountancy practice in Wales providing practical support and strategic accounting and tax advice for small to medium-sized businesses. Headquartered in Swansea, the firm has offices in Cowbridge, Carmarthen, Pembroke, Haverfordwest and St David’s.