Selling a property is stressful enough without an unexpected tax deadline landing on your desk a few weeks later. Yet that’s exactly what happens to many UK property sellers who aren’t aware of the 60-day Capital Gains Tax (CGT) reporting rule. Miss it, and you could be facing penalties and interest before you’ve even had time to enjoy the proceeds of your sale.
At Oasis Accountants, we regularly help landlords and homeowners across London navigate this rule, and it’s one of the most common areas where people get caught out simply because they didn’t know it applied to them. Here’s what you need to know before you put a property on the market.
What Is the 60-Day CGT Rule?
Since 27 October 2021, anyone who sells or disposes of UK residential property that isn’t their main home has been required to report and pay any Capital Gains Tax owed within 60 days of completion. This is separate from your annual Self Assessment tax return, and it’s a legal obligation in its own right.
The rule was introduced to bring forward tax collection on property sales, rather than waiting for the following January’s Self Assessment deadline. In practice, this means the reporting window is far tighter than most sellers expect.
Who Does This Apply To?
The 60-day rule applies to UK residents who sell or dispose of:
- Buy-to-let properties
- Second homes and holiday homes
- Inherited property that isn’t your main residence
- Land with residential development potential
It generally does not apply if the property being sold is your only or main home and qualifies for full Private Residence Relief. However, this exemption isn’t automatic in every case — if you’ve let out part of the property, worked from home extensively, or been absent for periods of time, some of the gain may still be taxable and reportable.
Non-UK residents face similar reporting obligations, and in most cases must report all UK property sales within 60 days, even where no tax is due.
How the 60 Days Are Counted
The clock starts on the date of completion, not the exchange of contracts. This distinction matters. Many sellers assume they have 60 days from when they accepted an offer or exchanged contracts, but it’s completion that triggers the deadline.
For example, if completion takes place on 1 March, your CGT return and any payment must be submitted by 30 April. Weekends and bank holidays are not excluded, so it’s worth marking the date the moment your sale completes rather than waiting for a reminder.
How to Report and Pay
Reporting is done through HMRC’s UK Property Account, a separate online system from standard Self Assessment. If you don’t already have one, you’ll need to register for a Government Gateway account and set up a UK Property Account before you can file.
The process involves:
- Calculating the gain on the property, factoring in the original purchase price, allowable costs (such as legal fees, stamp duty, and qualifying improvement costs), and any reliefs you’re entitled to.
- Submitting the return through the UK Property Account within the 60-day window.
- Paying any tax owed by the same deadline — HMRC doesn’t offer a separate payment date.
If you’re already registered for Self Assessment, the gain will also need to be included on your annual tax return, though any tax already paid via the 60-day return is credited against your final bill.
What Counts as an Allowable Cost?
Getting your calculation right matters because both overpaying and underpaying create problems. Costs you can typically deduct from your gain include:
- The original purchase price of the property
- Stamp Duty Land Tax paid on purchase
- Estate agent and solicitor fees on both purchase and sale
- Costs of qualifying capital improvements (an extension, for example, rather than routine maintenance or repairs)
You’re also entitled to your annual CGT exempt amount, which reduces the taxable portion of the gain — though this allowance has fallen significantly in recent tax years, so it covers less than it used to.
Penalties for Missing the Deadline
HMRC treats the 60-day rule seriously, and the penalty structure reflects that:
- Late filing: an initial £100 penalty if the return is late, followed by further penalties if it remains outstanding beyond 6 and 12 months.
- Late payment: interest accrues daily on any unpaid tax from the payment due date, on top of separate late payment penalties.
Because these penalties apply even if no tax is ultimately owed, it’s a mistake to assume you’re safe from consequences just because the sale didn’t generate much of a gain. The reporting obligation and the payment obligation are treated as two distinct requirements.
Common Mistakes We See
After years of helping clients through property sales, a few recurring issues stand out:
Assuming the main residence exemption applies automatically. If any part of the property was rented out, used as a home office, or if you didn’t live there for the whole period of ownership, the exemption may only apply partially.
Miscalculating the gain. Sellers sometimes forget to include allowable costs or mistakenly include costs that don’t qualify, leading to an inaccurate return that needs correcting later.
Confusing exchange and completion dates. As noted above, this is one of the most frequent causes of missed deadlines.
Not accounting for jointly owned property. Where a property is owned by more than one person, each owner has their own individual reporting obligation and their own 60-day deadline to meet.
Leaving it too late to value complex assets. Where a property has been inherited, or where part of it has been used for business purposes, valuing the gain accurately can take longer than expected, so starting early is essential.
Why Getting Professional Advice Early Makes a Difference
The tightest part of the 60-day rule isn’t the calculation itself; it’s the timeline. Sixty days sounds generous until you factor in gathering historic purchase documents, valuing improvement works, and setting up a UK Property Account you may never have used before.
Speaking to an accountant before you complete, ideally before you even list the property, gives you time to:
- Confirm whether the sale is reportable at all
- Identify which reliefs and allowable costs apply to your situation
- Prepare an accurate calculation in advance, rather than under deadline pressure
- Avoid the penalties that come from a rushed or incorrect submission
At Oasis Accountants, our property tax specialists work with landlords and homeowners across London to manage this process smoothly, from calculating the gain through to submitting the return on your behalf. If you’re planning to sell a property that isn’t your main home, it’s worth having that conversation before contracts are exchanged rather than after completion, when the clock has already started ticking.
Thinking of selling a property in the near future? Talk to our team for a consultation on your CGT position before you list.
