With rising interest rates and persistent high inflation, the costs of operating buy-to-lets present a serious challenge to landlords. The proposed “no-fault eviction” legislation in England, and the introduction of additional red tape in Scotland for short-term lets (by virtue of having to apply for a short-term let licence), has soured the buy-to-let market.
It’s no surprise, then, that landlords might consider an exit now while property prices remain resilient.
Until recently all you needed to sell a buy-to-let property was a willing buyer and an estate agent or solicitor to handle the legal paperwork.
But the property transaction landscape changed from 6 April 2020. HMRC introduced a requirement for sellers to report (via a Property Capital Gains Tax (CGT) return) and pay tax on their sales of UK residential property within 30-days.
Thankfully, good sense prevailed, and this extremely tight time limit was extended to 60-days. Nonetheless, this still doesn’t give sellers much time to get their affairs in order. Failure to meet this deadline may result in penalties and additional financial burdens.
You’ll generally be required to comply with the 60-day reporting requirement if you are an individual, trustee of a trust, personal representative/executor of an estate, or a partner of a partnership.
Not all disposals are reportable to HMRC within 60-days. For example, if the property has been your main residence throughout ownership or if there is no tax to pay. (Though you might still have something to report when you come to file your self-assessment tax return.)
There are also special rules for people who sell UK residential property and reside overseas.
If you’re looking to sell your buy-to-let property, or you’ve already done so, CT can help. We have considerable experience helping clients quantify their tax liabilities and making the necessary Property CGT forms submissions to HMRC.
Please get in touch and we can ensure that you stay in HMRC’s good graces. Reach us via mail@ct.me or call 0131 558 5800.
