I purchased a one-bed flat in the UK in 2014 for £142,730 and sold it in mid-April 2023 for £182,025. I jointly own another property in the Netherlands. As I'm permanently based in the Netherlands (where I pay tax), and had been granted non-dom status in the UK, I wasn't sure if I needed to pay capital gains tax in the UK.
I assumed that if I did, it would be part of my 2023 tax filing. I file an online UK tax report every year, saying that I have non-dom status – as it happens the amount I got in rent always fell below the threshold even if I did have to pay tax. All my earnings including the rent from the flat are declared in my annual Netherlands tax report.
My question is do I need to pay UK capital gains tax, and if I do, and am therefore late paying it, and what are the consequences of this?
BC, via email
Jason Porter, business development director at Blevins Franks, says:
You are required to declare the disposal to HMRC, including the capital gains calculation in your UK tax return for the relevant year, and pay any UK capital gains tax (CGT) due. The date of disposal for UK tax purposes is the date you entered into an unconditional contract, so for property, this is the date of exchange of contracts, not the date of completion. If the date of exchange was before mid-April 2023, it is important to establish if this was on or before 5 April 2023, the final day of the 2022-23 tax year. After this date, the disposal falls into the 2023-24 tax year. This will determine which tax return the capital gains calculation should have been included with, and when it should have been submitted. If it falls into the earlier year, the deadline would have been 31 January 2024. If you have already submitted a UK tax return for the year, you may wish to submit an amended version, including the capital gains calculation on the property sale. In addition, as it is a sale of UK residential property, you should have also submitted the calculation, a 60-day property disposal form, and any tax due to HMRC within 60 days of the date of completion.