Capital gains tax reporting and record-keeping
Other tax issues
On this page, we discuss what reporting and record-keeping obligations you have where you make a disposal on which capital gains tax (CGT) is chargeable. In some cases, you may be required to report the disposal to HMRC (and potentially pay the tax) within 30 days.
How and when do I report capital gains to HMRC and pay my CGT bill?
If you normally complete a tax return, you report your capital gains on a Self Assessment tax return, using the capital gains pages. If you usually submit a paper tax return, you can find the specific pages on GOV.UK.
You need to use these pages if your gains are more than the annual exemption for the year or if your sales proceeds are more than £49,200 (for 2020/21) even if your gains are less than £12,300 (for 2020/21). Note that you do not have to complete the capital gains pages if your only disposal is of your home and the gain fully qualifies for private residence relief.
If you make a disposal of UK land and property, you may also need to report the disposal of the property to HMRC on a separate return and pay capital gains tax within 30 days of the date of completion.
Such a return is not required if the 30-day deadline falls after having already disclosed the disposal on a Self Assessment tax return. In this case the 30-day deadline for paying the tax is also disapplied. Similarly, the requirement to file a 30-day return is waived if the 30-day deadline occurs after the deadline for the Self Assessment tax return on which the disposal should be reported (for example, if contracts were exchanged towards the end of the tax year but completion did not occur until the following January).
If you make the disposal as a non-resident, you should report it within 30 days, even if there is no tax to pay. From 6 April 2019, this applies to disposals of all UK land and property, not just residential property. If there is any tax to pay, then for disposals on or after 6 April 2020 it is also due within 30 days in all cases (previously it was possible to defer payment until 31 January following the end of the tax year if you filed a Self Assessment tax return). There is information about this on GOV.UK.
For disposals on or after 6 April 2020, UK residents disposing of UK residential property should also report it within 30 days, unless private residence relief applies to exempt the whole gain or there is otherwise no tax to pay. Any tax due on the gain should also be paid within 30 days. See also our news article: Sold a property after 6 April 2020? Don't get caught out.
Please note that you are required to report these disposals within 30 days even if you intend to file a Self Assessment tax return for that year at some later point. We give further information below on how to make the report.
|UK tax residence status||Asset type||Required to report the disposal within 30 days?||Deadline for paying tax|
|Resident||UK residential property||Only if there is tax to pay*||30 days|
|Anything other than UK residential property||No||31 January following the end of the tax year|
|Non-resident||UK land and property||Yes*||30 days**|
|Anything other than UK land and property||No||N/A|
*HMRC have stated that late filing penalties will not be issued for individuals (both residents and non-residents) reporting transactions completed between 6 April 2020 and 30 June 2020 provided the 30-day return was submitted by 31 July 2020.
**Capital gains tax for non-residents may not apply to the whole gain. If not, you may have to pay more tax if you return to the UK after a period of temporary non-residence. See our guidance for more information.
I do not normally complete a tax return. How do I report my gains?
This depends on whether you have made a disposal of property which requires you to complete a return within 30 days of completion of the disposal.
Disposals for which a return is not required within 30 days
You have a choice.
You can report your gains using a ‘real time’ online service on GOV.UK if you are UK resident. Using this service is optional and the gains can be reported at any time after the disposal up to 31 December after the tax year when you had the gains. For example, if you disposed of an asset and made a gain in January 2020, this would fall in the 2019/20 tax year (which ended on 5 April 2020) and you would be able to report the gain using the ‘real time’ service up to 31 December 2020.
You need a Government Gateway account to use this service, which you can set up as part of the reporting process. If you report your gains in this way, you will activate your Personal Tax Account, if you have not already activated this. This means you do not need to wait until after the end of the tax year to report your gains in a tax return.
If you use this service to report your gains, you will not need to file a Self Assessment tax return for that year assuming you have no other reason to do so. However, if you do need to file a Self Assessment tax return then you will need to report the gains again on this return.
If you choose not to use the ‘real time’ service, you will need to contact HMRC and register for a Self Assessment tax return by completing form SA1, or telephoning the Self Assessment helpline. You should do this by 5 October following the end of the tax year for which you have CGT to pay (or losses that you want to notify to HMRC for carrying forward).
If you are unlikely to need to complete a tax return again in the future, as soon as you have sent in this tax return, contact HMRC requesting that you be removed from Self Assessment so that they do not keep on sending you tax returns to complete.
Disposals of UK land or property on or after 6 April 2020 for which a return is required within 30 days
If you are required to complete a return within 30 days of completion of the disposal of UK land or property, whether or not you are UK resident, you should use HMRC’s new Report and pay CGT on UK property service for disposals on or after 6 April 2020. This is not optional – you must do it if you fall within the criteria for making a 30-day report.
Guidance for non-resident individuals who do not have a National Insurance number or Unique Taxpayer Reference (UTR) can be found here.
Again, if you use this service to report your gain(s), you will not need to file a Self Assessment tax return for that year assuming you have no other reason to do so. However, if you do need to file a Self Assessment tax return then you will need to report the gain(s) again on this return.
We summarise the reporting methods for disposals on or after 6 April 2020 in the following table:
|Required to report the disposal within 30 days? (see Table A above)||HMRC's 'real time' Capital Gains Tax service||HMRC's 'real time' Report and pay CGT on UK property service||Self Assessment tax return|
|Yes||N/A||Required in all cases||Only required if issued with a return by HMRC or otherwise meet Self Assessment criteria|
|No||Optional||N/A||Required if gain not reported using 'real time' Capital Gains Tax service or if issued with a return by HMRC or otherwise meet Self Assessment criteria|
What records do I need to keep for CGT?
If you make a taxable capital gain, you generally need to complete a Self Assessment tax return, so you need to keep relevant documents in connection with the gain or claim for losses or other reliefs. Essentially, you need records that, if necessary, will enable you to answer any HMRC queries.
When we refer to market value in the following guidance, we mean the price your asset might reasonably be expected to fetch on the open market.
You usually acquire an asset when you buy it, but you might also have inherited it, received it as a gift or some other way.
In all cases you need to keep records of the original cost, incidental costs associated with acquiring the asset and sometimes records showing the value of the asset on a specific date.
You may need to keep a record of some or all of the following:
The original cost
If you bought the asset after 31 March 1982 you need to keep records showing the original cost of the asset – such as receipts for purchase. If these are not available you may need to get a valuation of the asset at that date from, for example, an estate agent or an auctioneer and you need to keep proof of any such valuation safe for future use.
If you received the asset some other way – for example by inheritance or gift – you need to find out the market value on the date you acquired it. If you inherited the asset, the executors of the deceased should have provided you with this information.
The market value at 31 March 1982
If you owned the asset on 31 March 1982, you need to work out the market value of the asset at that date and use this in your CGT calculations instead of your actual costs up to that date. You need to keep any records that help you do this.
You may need to get a valuation of the asset at 31 March 1982 from, for example, an estate agent or an auctioneer and you need to keep any such valuation safe for future use.
Market value at other dates
There are other times when you need to use the market value of the asset on a specific date in your CGT calculations instead of the cost.
For example, if you dispose of an asset left to you in a Will by a relative or friend, you use the market value on the date of death instead of any actual cost in your calculations. This valuation might have been done when the person died, especially if an inheritance tax return was done. If so, you will use that valuation as your cost.
Or, if you gave an asset to your child, you use the market value on the date of the gift as the proceeds, instead of any amount received. Your child would then use that market value as their cost if they dispose of the asset in future.
You may need to get a valuation of the asset from an estate agent or auctioneer. If you want you can get HMRC to check your valuation so that you have an agreed figure for your tax return. In that case you should complete and send form CG34 Post Transaction Valuation Check to HMRC after you have disposed of the property. You can find the form on GOV.UK.
Additional records you may need to keep
If you incurred other allowable costs when acquiring the asset – such as stamp duty land tax (or land and buildings transaction tax in Scotland/land transaction tax in Wales) and any fees paid for professional advice, estate agents costs, valuation fees or other costs of transfer including advertising – you need to keep a record of the amounts involved and any documents relating to that expenditure.
You deduct these costs in the calculation when working out any capital gain.
You can also deduct any VAT on the costs, unless you are VAT registered and can reclaim the VAT.
There are other costs during your ownership of an asset which can be deducted from the calculation for CGT purposes:
If you have spent money improving the value of your asset, you may be able to deduct these costs, as long as the improvement is still reflected in the value of the asset when you dispose of it. For example, if you build a garage to add value to your property – and it is still part of the property when you sell or dispose of it – you can deduct the cost of the garage.
You cannot however include maintenance costs, such as decorating or any repairs.
You can also deduct any VAT paid on improvements, unless you are VAT registered and can reclaim the VAT.
If your base cost is based on market value (for example, it was a gift to you or it was inherited), you cannot take a deduction for improvement costs which have been incurred prior to the date of the valuation. See the example of Neil.
Confirming you own the asset
If you spend money proving that you own or have rights over an asset you may be able to deduct this cost.
When you dispose of your asset
You usually dispose of an asset when you sell it, but you may also give it away, exchange it for another asset, transfer it to someone else or it may have been lost or destroyed.
In all cases you need to keep records of the 'disposal proceeds' – usually the amount you receive – and sometimes records showing its value on a specific date.
You also should keep records of the amount you receive if you otherwise dispose of the asset – this may include, for example, a sum received as compensation for a damaged asset.
Any extra costs
If you spend money selling or otherwise disposing of an asset – such as legal fees, valuation fees or advertising costs to find a buyer or an estate agent’s commission – and you deduct these in your CGT calculation, you need to keep records of these costs.
|◀ Individuals not resident in the UK|