Gains arising from UK residential property must be reported using HMRC's online reporting system. The system is new and experiencing service issues.

From April 2020, Capital Gains Tax (CGT) arising from UK residential property must be Reported online and the tax paid within 30 days of completion. The tax year 2020/21 will be the first year in which the new system will operate. The Institute of Chartered Accountants in England and Wales (ICAEW) has reported that a couple of significant issues have come to light in relation to the online reporting system.

The first issue concerned the reporting of gains in 2020/21:

  • If a return was filed for a gain arising in 2020/21 and then a further return was filed for a gain arising in 2021/22, it has been reported that the calculation issued was more than likely to be incorrect.
  • HMRC have reported that this issue was fixed by 5 May.
  • Anyone with concerns should contact the CGT helpline.

The second issue concerns the ability to offset overpaid CGT against an Income Tax liability in 2020/21.

  • Where a CGT liability has been paid in line with the 30-day requirement and an overpayment was made, this excess will not be available to offset any Income Tax liabilities arising in the same tax year as part of the Self Assessment return.
  • HMRC are insisting that the full Income Tax liability is settled and that any overpayment of CGT must be reclaimed by amending the property return.
  • The ICAEW are in discussions with HMRC to resolve this inefficiency. 

Useful guides on this topic

CGT: Residential Property  - signpost
How are income and gains from UK residential property taxed?  What taxes do I need to think about for UK residential property?

CGT: Reporting, how to report CGT?
How do you report your capital gains? What return do you use?

Different ways of taxing UK property
This guide summarises the different ways of taxing income, value and gains in respect of the exploitation of UK property.

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