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.”