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Disposal of UK residential dwellings


Date posted: 2024-03-19

What is the disposal of a UK residential dwelling?

Disposal of a UK residential dwelling is when an individual sells or disposes their interest in a UK property (that is not their main home). This is a taxable event that may trigger capital gains tax (CGT) liability. From the 6th of April 2020, UK and non-UK residents have 60 calendar days from the date of the ‘disposal’ to notify HMRC. A payment of their estimated CGT liability may also have to be paid to payments on account within these 60 days. You will have to pay CGT if you make a ‘gain’ when you sell a property that is not your home.

A residential property can be defined as –

  • A building used or suitable for the use of a dwelling
  • Properties in the process of being constructed or adapted for use as a dwelling
  • The right to acquire a UK dwelling ‘off-plan’
  • The garden or grounds of such a building, including structures on the garden or ground

Before the new legislation, the tax would be calculated on a personal tax return, this meant you could have up to 21 months before any tax was due. However, HMRC are changing this rule meaning you will have to pay the tax in less time. The rule now states that residents have up to 60 days to report a ‘disposal’ to HMRC and pay any CGT they owe.

Penalties –

Failure to do this would result in the following penalties – If you miss the deadline by up to 6 months there is a penalty of £100. If the deadline is missed by more than 6 months, a further penalty of £300 or 5% of any tax due (whichever is more) would be issued. Then if the Deadline is missed by more than 12 months a further penalty of £300 or 5% of any tax due (whichever is greater) would be issued on top.


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