The 60-Day Rule: What You Need to Know
In 2021, HMRC introduced a significant change for UK residents selling property (not your main home). Now, if you sell a property and make a taxable profit, you must:
- Report the sale to HMRC within 60 days of the completion date.
- Pay any CGT due within the same 60-day window.
Previously, you could declare property sales as part of your annual Self-Assessment Tax Return, with CGT due by the following 31st January. Now, HMRC wants their share much sooner.
Does This Rule Apply to You?
Ask yourself:
- Are you a UK resident who sold a UK residential property (not your main home)?
- Did you make a profit on the sale of more than £3,000 (profit = sale proceeds minus original cost)?
If you’ve answered “yes” to both, you’ll need to report the sale to HMRC and pay any CGT due within 60 days of the sale’s completion.
How Do I Report My Gain and Pay the CGT?
The process is done through HMRC’s online digital service using your personal Government Gateway account. If you don’t already have one, you’ll need to register here: 👉 Register for Government Gateway
Once that’s sorted, you’ll need to set up a Capital Gains Tax on UK Property Account via this link: 👉 Report and Pay CGT for Property Sales
Feeling daunted? Don’t worry. At DNA Accountants, we’ve walked many clients through this process step by step. If you need help, get in touch using this link—we’re happy to guide you.
What You’ll Need to Report
To report and calculate your CGT, you’ll need the following details:
- Completion date of the sale
- Sale proceeds (final price agreed)
- Selling costs (e.g., estate agent and legal fees)
- Original purchase cost of the property
- Date of purchase
- Details of any capital improvements (e.g., an extension), including dates and costs
- Timeline of ownership (noting periods when the property was empty, lived in, or rented out)
- Estimate of income in the year of the sale
Do I Still Need to Include This in My Tax Return?
Yes! Even though you’ve reported the sale and paid the CGT under the 60-day rule, you must still include the sale in your annual Self-Assessment Tax Return. Don’t worry—any CGT you’ve already paid will be accounted for, so you won’t pay twice.
What If I Miss the Deadline?
HMRC imposes penalties for late filing:
- £100 if filed after 60 days but within 6 months of the sale
- An additional £300 (or 5% of the CGT due, if greater) if filed after 6 months but within 12 months
- Another £300 (or 5% of the CGT due, if greater) if filed after 12 months
Interest will also be charged on any unpaid CGT after the 60-day deadline.
How Can DNA Accountants Help?
At DNA Accountants, we’re here to make the process as smooth as possible. From calculating your gain and tax to helping you navigate HMRC’s digital forms, we’ll guide you every step of the way.
Need a helping hand? Come into the office for a friendly chat (and a great coffee!) while we take care of the paperwork.
📞 Call us on 01737 570127 to see how we can help.
