UK residents
UK residents realising a taxable gain on the sale of UK residential property must report and pay any capital gains tax due within 60 days of the sale completion date. The sale is reported to HMRC via a standalone ‘Capital Gains Tax on UK Property Account’. This is an online form submitted via the UK Government Gateway.
‘Mixed use’ transactions (properties with both residential and non-residential elements) are also subject to these rules and must report the residential part to HMRC within 60 days.
Paper forms may be used by taxpayers with special requirements or are so called, ‘digitally excluded’. Accountants and agents can also be instructed to submit the forms on behalf of clients.
UK non-residential land and property
For UK residents, the sale of non-residential land and property does not fall within the 60 day reporting requirement. These disposals can be reported to HMRC via a self-assessment Tax Return within the usual self-assessment time frames (see below).
Non UK residents
Non-UK residents have similar reporting requirements. However, there are some key differences:
- Gains on all UK land and property sales must be reported (not just residential property)
- Gains on ‘indirect’ disposals are chargeable. These are assets which derive at least 75% of their gross value from UK land. For example, the sale of shares in a UK property rental business
- The gain must be reported to HMRC irrespective of whether a tax liability arises
- The value of UK residential land and property can be rebased to its value in April 2015
- The value of UK non-residential land and property can be rebased to its value in April 2019.
Self-assessment tax returns
Where a taxable gain arises, details of the gain may also need be reported on an annual Tax Return. This will be due by the following 31st January after the tax year in which the gain arose e.g., 31st January 2026 for a disposal in the tax year ending 5th April 2025. The tax due on the gain (and any other self-assessment liability) will also become due at this point. This liability will be reduced by the tax already paid on submission of a previous UK Property Account.
Executors, personal representatives and trustees
These groups of individuals also fall within the scope of these rules and will need to consider if they should report capital gains within 60 days.
It is important to bear these reporting requirements in mind as there can be significant penalties for non-compliance.
Capital gains tax rates
The following rates apply:
- 18%/24% for residential land and property sales
- 10%/20% for non-residential land and property sales.
The rate payable is linked to an individual’s taxable income and whether the gain falls within the basic or higher rate tax band for income tax.
Ways to reduce your liability
It is always important to take early advice, as it is often too late to mitigate a liability once the transaction has occurred.
Individuals may be entitled to a capital gains tax annual exemption of £6,000 for the year ended 5th April 2024. This has reduced to £3,000 from the current tax year (ending 5th April 2025). Trustees are entitled to half of the exempt amount of an individual (£3,000/£1,500).
Not all non UK residents will be entitled to an annual exemption, as some double tax treaties do not provide for personal allowances.
Tax relief may be available where a property has been occupied as a ‘main residence’. Some periods may also qualify as ‘deemed occupation’ where, for example, a person works overseas for a period of time and then returns to live in the property.
Further tax planning considerations could be:
- transfers between spouses
- main residence elections
- tax planning to reduce taxable income
- tax deferral investments – Enterprises Investment Schemes (EIS)
- personal pension contributions.
Next steps
For any enquiries regarding the above, please contact Tom Annat on t.annat@uhy-rossbrooke.co.uk or your usual UHY adviser.
