Normally when an individual sells a UK residential property at a gain, they are required to submit a capital gains tax on property disposal (CGT PPD) return with 60 days of completion.
Non-UK resident individuals must submit a CGT PPD return whether the property is sold at a gain or a loss. The associated capital gains tax (CGT) must also be paid to HMRC by the end of the 60-day period (slightly longer in some cases where a paper return is submitted). Taxpayers within the self assessment (SA) regime will also need to report the disposal on their SA tax return following the end of the tax year.
However, where a sale takes place towards the end of the tax year (5 April), a SA tax return can be filed instead of the CGT PPD return in relation to that tax year. The SA tax return must be filed within 60 days of completion of the sale; it would require a quick turnaround following the end of the tax year. If this is achieved, a CGT PPD return does not need to be submitted for the property disposal. Note that it is the date of exchange, rather than the date of completion, that determines the tax year of the disposal.
An added bonus of submitting via SA tax return is that the CGT is payable by 31 January following the tax year, instead of the shorter 60-day period. This may offer a significant cash-flow advantage to taxpayers who are able to prepare and submit their SA tax returns within the 60-day window following completion.
Find more Tax Faculty information on disposing of UK residential property:
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