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How do I Report on the Disposal of My Residential Property?

Tax Questions - 30 Day Rule

Author: Shona Humphreys, Chartered Tax Advisor

Shona Humprheys

Since April 2020, individuals selling or gifting residential property within the UK are required to notify HMRC on a UK Property return and pay any Capital Gains Tax (CGT) due within 30 days of completion.

Some disposals are exempt from this new requirement. For example, if you sell your home and have lived there since you bought it. Usually, no Capital Gains Tax would be paid meaning no UK property return is required.

30 days is a short time to gather the relevant information, prepare a Capital Gains Tax calculation, and submit the return to HMRC, so here are 5 actions that can be taken prior to the sale:

  1. Make a note of when you acquired the property and how. If you bought it, try to find your completion statement from the time of purchase. If you inherited it, look up the property’s probate value.
  2. If you acquired the property before 31 March 1982, ask a local estate agent to provide a valuation of the property at that date. This value will replace your original acquisition cost.
  3. Prepare a record of expenditure incurred on improving the property. This does not include general repairs and maintenance, but expenditure that has significantly enhanced the property and is reflected in the state of the property at the time of disposal.
  4. Make a note of any capital loss that you might have brought forward from a previous tax year.
  5. Calculate an estimate of what your total taxable income will be for the tax year that the property is sold in.

You should ask your solicitor for a completion statement to be prepared immediately following the disposal, which should show both the date of exchange and the date of completion of the transaction.

Remember, the 30-day reporting requirement only applies to the disposal of residential properties. Commercial properties and land are exempt from these requirements.

Talk To Us

Contact our team of tax specialists at LHP today to discuss how we can help you meet your reporting obligation. Drop us a message on Let’s Talk and we can take things from there.

With over 85 years’ experience in tax advice and five offices based across South Wales, you are in safe hands.

References: https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

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