Property Capital Gains Tax (CTG) late filing penalties

An individual may have to pay Capital Gains Tax if they make a profit (‘gain’) when they sell (or ‘dispose of’) property that’s not their home. They must report and pay any Capital Gains Tax on most sales of UK property within 60 days by completing a ‘Capital Gains Tax on UK property’ return.

Separate automatic penalties apply to late filing of the CGT return and late payment of the CGT liability. These apply equally to UK residents and non-UK residents. The penalties are cumulative and can only be appealed if the taxpayer has a reasonable excuse for the failure.

Late filing penalties

If an individual files their CGT return after the deadline, they will be charged the following:

• A penalty of £100 if the return is not filed within 60 days
• A further penalty of £300 or 5% of any tax due, whichever is greater if the deadline is missed by more than 6 months
• A further penalty of £300 or 5% of any tax due, whichever is greater if the deadline is missed by more than 12 months

Additionally, HMRC have the discretion to charge daily penalties of £10 per day up to a maximum of 90 days if the return is more than three months late.

Interest will also be charged if the tax remains unpaid after 60 days from completion.

If actual figures are not available when making the report to HMRC then estimated figures can be used rather than delaying making the report after 60 days. The individual has 12 months to go back and amend the return when actual figures are available. Alternatively, they may choose to amend the figures on their self-assessment return.

If an individual is late paying their CGT liability, they should contact HMRC as soon as possible. They may be able to offer a time to pay arrangement, which will allow the individual to spread the cost of the tax over a period of time.

Appeals

The taxpayer only has 30 days to lodge an appeal with HMRC against a tax penalty, and the penalty can only be appealed if the taxpayer has a reasonable excuse.

If you are unsure about your CGT obligations, or if you have any questions about CGT penalties, you should contact HMRC or a qualified tax advisor.