Most people are aware that when you sell your main residence there will be, in most cases, no capital gains to report and no tax to pay. The reason for this is because there is a specific exemption which means that where a property has been occupied as your main residence it is possible to claim this relief. There is no necessity to formally make a claim as the relief is automatic for individuals. However, trustees and executors will need to complete a tax return to claim the relief as it is not given automatically to these groups.
However, if there have been periods when you have not occupied the property as your main residence, perhaps because you have worked away from home or you have a second property which you have also used, then there may be a potential capital gain.
From April, 2020, it is now necessary to report capital gains to HM Revenue and Customs within 30 days of the completion date where there is a capital gains tax liability. This reporting requirement applies to all UK residential property whether or not it has been used as your main residence, a long term residential let or a furnished holiday let. It applies to properties sold or gifted by individuals, trustees and executors of estates.
The online process for individuals and trustees is relatively straight forward. However it is more complex for executors.
If you are looking to sell any residential property which has not been used 100% as your main residence you should take tax advice to ascertain whether there may be tax to report and pay within the 30 day deadline. HM Revenue and Customs were taking a light touch approach for the first year of these new rules. However now that we are into the second year interest and penalties are likely to be charged for late registration and payments.
If you require further information contact one of our tax specialists.