CGT Late Filing Penalties

Published by UK Property Accountants
Published Date: September 13, 2023

Not declaring or lately declaring the capital gains tax is subject to penalty. Knowing basic rules on CGT filing deadlines, you can avoid large fines and penalties.

It is essential not only to report but also to pay Capital Gains Tax within the deadline.

Deadline for Reporting Capital Gains

The individuals must report capital gains tax on the UK property by 60 days of completion of sale.

Disposal of assets other than residential property can be reported in the self-assessment tax return (normally by 31st January following the tax year of making the gains).

Deadline for reporting capital gains

Payment of Capital Gains Tax

You must also pay capital gains tax for residential properties within the 60-day CGT reporting deadline. The rate of capital gains tax might be 18% or 28% depending on your total personal income for the tax year (which might not have been determined by the time of CGT reporting).

So, you have to calculate tax based on your estimated income. Later when you file your self-assessment, you can pay the remaining or reclaim overpaid capital gains tax.

For other assets, Capital gains tax must be paid by 31st January following the tax year of disposing the asset.

How to File CGT Return on Disposal of a UK property?

How to file CGT return on disposal of a UK property

Capital gains tax return is filled by creating a Property Account Number (PAN) in HMRC’s online service. You can create PAN by logging in through your Government Gateway ID.

If you do not have government gateway ID, you need to create one.

When is Capital Gains on UK Property not Reportable?

If the gain is less than annual exempt amount (currently Β£6,000 per individual), a UK resident does not need to report the gains. But a non-resident disposing a UK property must report the capital gains within 60 days regardless of the amount they gain.

Rates of Penalty for Late Filing of CGT

Not meeting CGT filing deadline attracts penalty. The penalty increases with the length of the delay:

Amount of penalty for not declaring (late declaring) Capital Gains Tax

              Delay by

An initial penalty of Β£100

1 day

Daily penalty of Β£10 per day for 90 days

3 months

A further penalty of the greater of β€œΒ£300” and β€œ5% of the estimated tax liability”

6 months

A second further penalty of the greater of β€œΒ£300” and β€œ5% of the estimated tax liability”

12 months

Capital Gains Tax Calculator

Calculate Capital Gains Tax Precisely with Our Tool – Simplify Your Tax Planning

HMRC can increase the rate of second further penalty if you withheld information. The increased penalty percentage rate depends on your behaviour (i.e., whether you withheld information deliberately and whether you were ready to disclose information by yourself).

Below table shows penalty rates for different behaviours:

Type of behaviour

Unprompted Disclosure

Prompted Disclosure

Non-deliberate

No penalty increase

No penalty increase

Deliberate

20% to 70%

35% to 70%

Deliberate and concealed

30% to 100%

50% to 100%

But HMRC is kind to reduce the increased penalty rate if you provide information easily. As shown below, β€œTelling”, β€œhelping” and β€œgiving access to records” can reduce the penalty:

30%
Telling
40%
Helping
30%
Giving access to records

Do you have any questions on Capital Gains Tax?

Contact us today for efficient and hassle-free assistance on CGT. 

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