Property disposal penalties are changing

by Aitch, posted in Capital Gains Tax

The government is changing the rules on late filing penalties for individuals who fail to report a disposal of UK residential property within the statutory deadline but subsequently report it on their self-assessment tax return. The changes take effect from 28 October 2026.

Currently, individuals, trustees and personal representatives who make a chargeable gain from disposing of UK residential property must report the disposal using a UK property disposal return and make a Capital Gains Tax payment on account within 60 days of completion. Failure to meet this deadline can result in late filing penalties.

Under the new rules, where the disposal is subsequently reported on a self-assessment tax return, the requirement to submit a separate UK property disposal return will end when the self-assessment return is submitted. Late filing penalties for the outstanding property disposal return will also stop accruing from that date.

The changes are intended to ensure that taxpayers do not continue to incur late filing penalties for failing to report a gain once they have subsequently declared it through self-assessment.

The measure applies to cases where the residential property disposal is reported on a self-assessment tax return delivered on or after 28 October 2026. However, it does not remove the original requirement to submit a UK property disposal return or the obligation to report the disposal within 60 days.

Source:HM Revenue & Customs | 02-11-2026
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Aitch
I'm Aitch, the Founder and CEO of CIGMA Accounting Ltd. As a Chartered Management Accountant and as a CIMA member, I've spent more than 16 years helping businesses, entrepreneurs, landlords, and individuals with tax planning, accounting, and HMRC compliance. As a chartered accountant in London, I'm passionate about making complex tax matters easier to understand and helping clients make confident financial decisions. Over the years, I've advised start-ups, SMEs, established companies, and high-net-worth individuals across a wide range of tax and accounting matters. My expertise includes Corporation Tax, Self-Assessment, Capital Gains Tax, Inheritance Tax planning, R&D tax relief, capital allowances, international tax, and resolving complex HMRC compliance issues. Whether clients need a business accountant, tax accountant, or strategic tax advisor, my focus is always on delivering practical advice that creates long-term value. One of my specialist areas is Making Tax Digital (MTD). I've worked extensively with businesses preparing HMRC's digital reporting requirements, helping them move to cloud accounting, improve financial processes, and adopt technology that makes compliance more efficient. I regularly speak at Making Tax Digital roadshows, industry events, and educational sessions in collaboration with Zoho Books, sharing practical insights into digital accounting, tax legislation, and the future of the profession. Many business owners looking for the best accounting firm in London are not simply searching for an accountant they're looking for trusted advice, responsive support, and long-term value. That's the approach I've taken in building CIGMA Accounting. My team and I work closely with businesses across London and the UK, providing accounting services, tax advisory, bookkeeping, payroll, VAT, company accounts, and strategic tax planning tailored to each client's goals. Through this website, I share practical guidance on UK taxation, Making Tax Digital, HMRC updates, Corporation Tax, Self-Assessment, and business finance. My aim is to provide reliable, straightforward information that helps business owners understand changing regulations, reduce compliance risks, and make informed financial decisions with confidence.
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