The Hidden Tax Deadline Catching Property Sellers Out

So, you sell a property or a piece of land, your solicitor completes the legal work, the funds arrive… and you mentally file it under “something for the accountant to deal with later”.

“Later” usually means January.

A few months pass by, and a surprise letter lands on your doormat. HMRC is asking for information about that property you sold, and they want to know why you didn’t report the sale within 60 days. You’re confused, and you pick up the phone to your accountant.

This scenario comes up far more often than you’d expect, even for sensible, organised people who thought they’d done everything right.

Let’s look at some of the most common questions and assumptions accountants hear when clients sell property in the UK.

Do I pay Capital Gains Tax when I sell my UK residential home?

In true Tax Advisor fashion… it depends.

If the property has been your only or main home for the entire period of ownership, you usually qualify for Private Residence Relief (PPR), which can mean no Capital Gains Tax at all.

• But real life is rarely that tidy. Problems often arise where:

• The property wasn’t your main home for the full period of ownership

• You moved out and rented it before selling

• You lived there briefly but owned it for many years

• The property includes land beyond the ‘permitted area’

• You inherited the property and later moved in

• The property was unoccupied for a period due to undergoing major renovations

In these cases, PPR may only apply partially, meaning some Capital Gains Tax could still be payable.

What if the property was an investment and I never lived there?

Generally speaking, unless the property wholly qualifies as your only or main residence, Capital Gains Tax is payable when you sell (or gift) UK residential property.

Consequently, HMRC expects:

• A UK Property Capital Gains Tax return, and

• Payment of the tax due – both within 60 days of completion

This includes cases where PPR covers only part of the gain.

This 60‑day deadline is completely separate from your Self‑Assessment tax return and that’s where many people come unstuck.

Shouldn’t my solicitor have handled this?

This is a very common assumption, and the truth is - Solicitors deal with the legal transfer of property.

They do not:

• Calculate Capital Gains Tax

• Assess reliefs

• Submit CGT returns

Some may offer this as an additional service, but it’s not their responsibility to notify you of the tax consequences. Unless you’ve specifically engaged someone to handle the tax, the responsibility sits with you.

Gifts can trigger the same problem

Another surprise for many people is that gifting property can still trigger a CGT reporting requirement.

Even if no money changes hands, HMRC usually treats a gift as if it were sold at market value. So gifting land or property to:

• Children

• Other family members

• Trusts

…can still require a 60‑day CGT return and payment of any tax due.

What if I sold commercial or non‑residential land or property?

This is where the rules are more relaxed for UK residents’ individuals only.

For UK commercial or non‑residential land and property:

• Any CGT due is reported through your Self‑Assessment tax return

• The tax is usually payable by 31 January following the end of the tax year

• There is no 60‑day reporting requirement

It is important to note that Non-Residents disposing of any UK Land and Property do not fall within this category and are required to report and pay any CGT within 60 days of completion.

Although UK residents don’t have to report within 30 days, there is still an option to report earlier.

HMRC allows an optional earlier report using the “Report a disposal of an asset” service via Government Gateway.

This can be useful if:

• You’re not otherwise in Self‑Assessment

• You want certainty and closure sooner

• The disposal is a one‑off transaction

It still requires an accurate calculation and correct application of reliefs, so care is needed.

What happens if the deadline is missed?

HMRC doesn’t shout straight away, which is why this often escalates quietly.

Missed deadlines can lead to:

• Late filing penalties

• Interest on unpaid tax

• Stressful correspondence months (or even years) later

The frustrating part is that these situations are usually avoidable with early advice.

When is the safest time to get advice?

Ideally before completion. If that’s not possible, then immediately after, within the 60‑day window.

This gives enough time to:

• Confirm the correct reliefs

• Obtain professional valuations where necessary

• Complete the calculation properly

• Meet all deadlines

Ultimately, it ensures you pay the correct amount of tax, with no unnecessary penalties.

How we help

At MW Tax, we regularly support clients who are:

• Selling land or property

• Unsure whether Capital Gains Tax applies

• Facing the 60‑day reporting requirement

• Dealing with one‑off property disposals

Sometimes it’s a straightforward filing job. Sometimes it’s about unpicking incorrect assumptions made years earlier. Either way, clarity early on makes all the difference.