Capital Gains Tax and the 60-day rule: How BSR Bespoke can help you file on time 

When disposing of a UK residential property, it may be necessary to notify HMRC about the disposal and settle the capital gains tax liability within a 60-day timeframe. The deadline for submission cannot be extended and failure to meet it may result in HMRC imposing financial penalties. If you'd like some expert assistance with any aspect of CGT, BSR Bespoke Chartered Accountants is ready to help. We can guide you through the process, advise you on the rules that are relevant to your situation, and ensure compliance with the 60-day rule. Here's what you need to know.

What is a capital gain?

It is the gain made when you dispose of an asset. This usually means selling it but can include giving away or exchanging it as gifts, transferring it to someone else, or receiving money for it.

Who does the 60-day CGT rule apply to?

The rule applies to individuals, trustees and personal representatives. It does not apply to companies or organisations making disposals of UK residential property.

The 60-day rule does apply to non-UK residents; however, this is under a slightly different scheme so please contact us if this applies to you.

What should you do if you need to file a CGT return?

If you are making a disposal that requires filing within 60 days, the onus is on you to be proactive. You will need to promptly identify and calculate your gains or losses, which may be time-consuming, depending on the complexity of the transaction. If your total taxable gains are above your tax-free allowance, you’ll need to report and pay CGT via the Government Gateway online.

You can tackle this yourself or enlist the help of professional accountants like BSR Bespoke. Our experienced and knowledgeable team can provide you with the assistance needed to ensure that your CGT return is filed correctly and on time.

We will prepare accurate calculations and complete all the necessary paperwork. We’ll also communicate directly with HMRC on your behalf to answer any queries and provide full support throughout the process.

What happens if I fail to submit a CGT return within 60 days?

If you do not submit your CGT return within the deadline, and pay the tax due, you may be liable to financial penalties, including a £100 fixed penalty. Being up to three months late incurs a £10 daily penalty. There is also a fixed penalty of £300 or 5% of the tax outstanding, whichever is the higher, when a return falls 6 months late and again at 12 months late. In addition, interest may be charged.

What are the reporting and record-keeping requirements for disposals subject to CGT?

You will need to keep accurate records and supporting documents throughout the process. This includes information regarding the date of disposal and descriptions/values of the asset(s) disposed of, details of sales proceeds, purchase prices and other costs associated with the transaction, for example, stamp duty or agent fees.

It is also important to accurately calculate the gain or loss on the transaction, as this will determine what CGT rate applies. For example, higher personal income levels attract a higher rate of tax so it is important to ensure that all calculations are correct and reflect the actual gain or loss incurred.

Bear in mind CGT exemptions, such as transferring assets between spouses or civil partners, or the sale of a property that was your main residence for the entirety of ownership and be ready to provide evidence of any exemptions or reliefs that you wish to claim.

After submitting your CGT return, HMRC may contact you if they have any queries about your return. They may request additional information or documentation to verify the accuracy of your declaration.

By ensuring that you file your CGT return within 60 days and making sure all relevant information is accurate, you can avoid the hassle and expense of penalties being imposed by HMRC.

The disposal is later reported on an individual's self-assessment tax return with the tax paid treated as a payment on account of your liability.

How can BSR Bespoke accountants help?

We understand that dealing with taxes can be overwhelming at times – especially when it involves submitting complicated documents such as CGT returns. We, therefore, offer a specialist service that gives tailored advice and guidance. We assist with all aspects of the process, including calculating gains, determining exemptions and reliefs to minimise your liability and ensuring timely submission. With our expertise and guidance, you can rest assured that your CGT return will be filed accurately and on time.

BSR Bespoke case study

One of our clients recently sold a premises that was their main residence for many years before they moved out and then rented the property out. The couple were able to claim PRR – Private Residence Relief – for the time they lived there and the last 9 months of ownership, which reduced a large proportion of the gain that was taxable.

We helped with the calculations, reviewed their estimated earnings for the tax year and completed and filed the return online with HMRC ahead of the deadline.