A tax expert is advising landlords to avoid failing to register their property sales for Capital Gains Tax within 60 days of completing the disposal.
Rick Schofield of accountancy firm Azetz says: “We have seen cases involving a number of buy to let landlords who have cashed in because they cannot afford to service higher mortgage debt; the rents aren’t covering the increases. They were caught off-guard by the Bank of England’s consecutive interest rate rises, which have gone up at the fastest pace in a generation and are now at a level last seen nearly 15 years ago.”
But he says some less experienced landlords don’t realise they must personally submit information to HMRC upon disposal of a letting property.
“That particular gateway form and process is not particularly well known amongst landlords. If you don’t submit the form within the 60 days, there is a £100 penalty. If the matter is still outstanding three months after that, it’s £300 or five per cent of the capital gains tax. If you have a string of disposals amounting to £3 million, and the landlords have not submitted the form in time, then that’s £150,000 HMRC can collect.”
The process is not straightforward for landlords to report capital gains - they have to create their own government gateway account, which cannot be done on their behalf by advisors.
Schofield adds: “Whilst many buy to let landlords are doing well, there are some, either accidental landlords or ones too highly leveraged, who are selling up in order to avoid financial pain due to the interest rate environment and corrosive inflation.
“However, some landlords are not selling up for forced reasons but rather to fund retirement – almost two thirds of landlords in England are aged 55 or above.
“There are around 2.74 million landlords in the UK, so you can understand how important it is for them to understand why the 60-day deadline matters and that it shouldn’t be confused with annual self-assessment tax returns.”
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I have gone through this nightmare of registering on the gateway for myself and my wife. An extremely convoluted process especially if you want to nominate an accountant to deal with the CGT through this gateway. To complicate the issue the gateway refused to register my wife and it took over 6 weeks tooing and froing with the helpdesk to get her account established. An unbeleivable nightmare and the stress it caused us as over 70's pensioners living overseas was massive. At least it is now 60 days, not the 30 days it was when we started selling.
Why does this story not surprise me, this government is useless. I can see a lot simply…. Forgetting 🤔🤔
Landlords are selling up because of the Renters Reform Bill. Why is that important information omitted. Incredible!
Exactly that!
Ellie, It’s not a Renters Reform Bill don’t be taken-in, its the greatest con-trick and breach of trust in our generation.
I would have thought if you want people to do something they might not want to do (paying tax included) then you need to make it easy!!
They are the public sector. They have multiples days available to do a single day's work. They just wrap everything up in red tape and make everything convoluted. They don't know how to make t simple neither want to.
The easiest way to avoid CGT is to self identify as royalty - then you will not be liable for IHT, CGT or income tax unless you decide you want to pay it.
So can someone please clarify. If I go through this gateway and pay the GGT within 60 days, do I also have to declare the gain in my self assessment?
I would say yes make sure you do. There are entries for this. Just make sure you don't pay twice. I assume there is a box to tick that you have paid already.
As Nick states yes you do.
The Gateway is also complicated.
Fortunately I took a decision to employ an accountant and although I have to pay them twice, once for the 60 days CGT and then again for my tax return I felt it was worth it.
Plus their fees are also tax deductible.
Two sold, will sell 2 further and then decide what I will do with the remaining as will have virtually paid off all mortgages, but I am not sure I want to stay as a Landlord.
I'm having an absolute nightmare evicting a non paying tenant from a property in Norwich. They have submitted a defence against the section 21 and I'm waiting to see what the Court wants me to do next. The defence is 95% made up nonsense with a tiny amount of fact. Never had a tenant behave like this before but feel that it is a direct result of the anti Landlord campaigns.
This is a real warning to me. But to have one house where I have to pay the mortgage yet the tenant has not paid me rent since September 2022 and at that time was £3000 in arrears due to Covid and change in jobs.
We have no voice and I can only see this getting worse!
Totally agree we have no voice. Vanessa Warwick of Property Tribes is good. But it's Beadle who's the most prominent. But he's useless. Hw only "welcomes" all the s*** thrown at us!
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