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Last updated: 4 Nov 2021

Buying or selling your home? Here's the latest tax rules

New UK tax requirements and reliefs, introduced in 2020, have impacted buying and selling UK property. Here’s what you need to know to take advantage of the tax reliefs available and to stay compliant.

UK tax reporting and payment

Since 6 April 2020, UK resident taxpayers have been required to report and pay Capital Gains Tax (CGT) to HMRC on disposals of UK residential property. The 2021 Autumn Budget doubled the amount of time to report and pay, from within 30 days to within 60 days of completion.

As part of the reporting, you’ll need to set up government gateway credentials and an online CGT account. This is a standalone account, which is separate from a self-assessment account. Once the CGT account is set up, you can provide the details and authorise your tax preparer agent. You will also need to include the CGT details on your self-assessment tax return if required to file.

Interest will start to accrue after the 60-day period, so get in touch with your tax advisor at the earliest opportunity to reduce any possible interest charges.

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Annabel Poon

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UK tax reporting and payment

Interest will start to accrue after the 60-day period, so get in touch with your tax advisor at the earliest opportunity to reduce any possible interest charges.

Relief available

Tax relief available

As a UK resident, you’re only required to report gains on UK residential property where tax is due (as opposed to non-UK residents who have been required to report a disposal of a UK residential property since 6 April 2015, even if there is no UK tax due). In most cases, you’ll be able to exempt the capital gain using Principal Private Resident relief (PPR relief).

PPR relief provides an exemption for the period of ownership and occupation. In addition, the final period of ownership can be relieved as long as you have occupied the property as your main residence at some point in the period of ownership. Since 6 April 2020, this final period of ownership has been reduced from 18 months to nine months.

In addition to PPR relief, you could claim lettings relief if you rented out the property. Since 6 April 2020, this relief only applies where you (the owner) occupied the property as your main home alongside the tenant.

Foreign tax credit

UK tax paid can be taken as a credit on the US tax return. If you’re on the ‘paid’ basis of taxation, this new system is a helpful step to ensure that UK tax is credited in the same tax year as the disposal. For further information on US tax implications of Americans owning a UK property, please click here.

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Looking for more information? If you have a query about any of the topics mentioned in this article, please fill in the form below and one of our experts will be in touch.