Capital Gains Tax: late filing penalties for returns for disposals of UK residential property
Published 28 October 2026
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This publication is available at https://www.gov.uk/government/publications/capital-gains-tax-returns-for-disposals-of-uk-land-and-late-filing-penalties/capital-gains-tax-late-filing-penalties-for-returns-for-disposals-of-uk-residential-property
Who is likely to be affected
Individuals, trustees and personal representatives of deceased persons who sell or otherwise dispose of interests in UK land.
General description of the measure
This measure makes changes to late filing penalties that apply to cases where a person fails to submit a UK property disposal return reporting a residential property disposal within the statutory deadline and at a later date reports the residential property disposal on their Self Assessment tax return.
Policy objective
The objective is to make sure that taxpayers are not subject to ongoing penalties for failure to report a Capital Gains Tax liability which they have subsequently reported.
Background to the measure
This measure was announced at Budget 2026.
Detailed proposal
Operative date
This measure takes effect for cases in which the residential property disposal is reported on an Self Assessment tax return delivered from 28 October 2026.
Current law
The law provides that when individuals, trustees and personal representatives make chargeable gains from the disposal of a UK residential property, they are required to:
- report that disposal on a UK property disposal return
- make a Capital Gains Tax payment on account
They must do this within 60 days of completing the disposal .
If that deadline is missed late filing penalties apply. The rules can be found at Finance Act 2019, Schedule 2 and Finance Act 2009, Schedule 55.
Proposed revisions
Legislation will be introduced in Finance Bill 2026 adding a new paragraph 5A to Schedule 2, Finance Act 2019 and new paragraph 4(4) to Schedule 55, Finance Act 2009. These amendments mean that where a person is required to submit a UK property disposal return but reports the disposal on their Self Assessment tax return:
- the requirement to submit the UK property disposal return ends when they submit their Self Assessment tax return
- late filing penalties stop accruing from that point
This makes sure that taxpayers are not subject to ongoing penalties for failure to report a liability which they have since reported, without removing the requirement to submit a UK property disposal return.
Summary of impacts
Exchequer impact (£million)
| 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 | 2030 to 2031 | 2031 to 2032 |
|---|---|---|---|---|---|
| nil | nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
This measure primarily impacts on those individuals who have sold a residential property, likely to be landlords, and instead of reporting the disposal and paying the Capital Gains Tax due within 60 days on the UK property disposal return, reported it on their Self Assessment tax return. This measure will make sure that late filing penalties cease once the Self Assessment tax return is received.
This measure is not expected to impact on family formation, stability or breakdown.
This measure is expected overall to impact individuals’ experience of dealing with HMRC as late filing penalties will cease accruing once the Self Assessment tax return is received.
Equalities impacts
This measure may apply to individuals regardless of their protected characteristics. The population impacted is expected to be a small subset of the Capital Gains Tax base. HMRC does not hold data that it can use to assess whether there are any disproportionate impacts to protected groups.
Administrative impact on business including civil society organisations
Companies do not pay Capital Gains Tax on their gains and this measure will have no impact on them.
Similarly, there should be no impact on civil society organisations.
Customer experience is expected to remain broadly the same as it does not alter how businesses deal with HMRC.
Operational impact (£million) (HMRC or other)
This measure will not require changes to HMRC’s processes or resources.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be kept under review through regular communication with affected taxpayer groups.
Further advice
If you have any questions about this change, contact the Capital Gains Tax (CGT) policy team on email: cgtbudget@hmrc.gov.uk.