From 6 April 2020, UK resident taxpayers will be required to submit a ‘UK land return’, reporting gains from the sale of any UK residential property to HMRC, as opposed to simply reporting the transactions on their UK income tax return as in previous years.

The UK land return is due to be filed within 30 days of the completion date of the property transaction, alongside a payment of the estimated capital gains tax due. Penalties will apply to any returns submitted or payments made after this period.

The tax payment will effectively be viewed as a payment on account towards the taxpayer’s capital gains tax liability for the tax year in question, with interest payable if additional tax is due when their annual tax return is submitted to HMRC.

A separate UK land return is required for each property gain a taxpayer realises during the year unless the completion dates fall on the same day.

Who is Required to File?

• UK Resident Individuals
• Personal Representatives
• Trustees
• Partnerships – a separate return is required for each partner.

Non-UK residents are already required to report UK property transactions in a similar fashion.

Exceptions

The taxpayer will not have to submit a UK land return in the following circumstances:

• The entire gain is covered by Principal Private Residence Relief (PPR) or other reliefs, such as Lettings Relief.
• The gain has arisen from the sale of non-UK based property.
• If a loss arises on the property sale, or else if it is covered by capital losses realised before the completion date.
• The gain is below the CGT annual exemption amount for the tax year in question (note that non-domiciled individuals electing to be taxed on the Remittance Basis are not entitled to this exemption).
• The taxpayer has already disclosed the disposal on their self-assessment tax return (likely only applicable in circumstances where a sale occurs towards the end of a tax year and a return is filed shortly after).

Please note that the above list is not exhaustive.

If you are thinking of selling your UK property, we recommend that you contact a UK tax advisor to discuss whether you will be affected by these changes.