NEW: HMRC confirms CGT property disposal rules for landlords after six-month wait

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HMRC has confirmed that landlords must file a capital gains tax (CGT) property return – even if the disposal has already been reported on a self-assessment (SA) return.

The government introduced the requirement to report disposals of UK residential property and pay the subsequent CGT within 60 days (previously 30) of completion in April 2020.

To meet the filing deadline – and given the difficulties with the CGT PPD system – many taxpayers and agents have already filed their SA return without first having filed the CGT PPD return.

The Institute of Chartered Accountants in England and Wales warns that they should file outstanding CGT returns on paper as soon as possible.

Most unsatisfactory

The accountant trade body says: “It is most unsatisfactory that it has taken HMRC almost six months to reach the decision that, where the SA return has already been filed, the CGT PPD return must still be filed, but on a paper return.

“However, this decision was somewhat inevitable. It would have been inequitable to excuse some taxpayers from the filing requirement or not to charge penalties when they have been charged to others who filed late.”

The one exception to the requirement to file a CGT return is where the SA return is filed within 60 days (or 30 days as applicable) of the completed transaction.

Read more: Complete to landlord tax for 2022/23

In most cases, a landlord will have paid the relevant tax for a disposal in 2020/21 by 31st January and interest would have stopped running when the payment was made.

ICAEW has asked that late filing penalties should take into account the six-month delay in HMRC making the decision on how the returns should be filed.

Read more about CGT rules.

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