Property disposal penalties are changing

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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