Fixing a property return anomaly

Where a disposal of residential property results in a tax bill, it has to be reported to HMRC within 60 days on a property disposal return (PDR). However, some individuals missed this requirement and have been unable to do so retrospectively because a self-assessment return has been filed in the meantime. What’s going on and what should you do in this situation?

Fixing a property return anomaly

UK residents have to file a property disposal return (PDR) where a disposal of UK-sited residential property leads to a tax bill, i.e. where the gain is not covered by private residence relief etc. The PDR must be filed within 60 days of completion, and a payment on account of the tax must be made at the same time.

A problem has come to light where a number of taxpayers should have filed a PDR but did not do so. The gains were then reported on the self-assessment tax return. The problem is that an electronic PDR cannot be filed once a self-assessment return is filed. There is a misconception that filing a tax return displaces the requirement to file a PDR. In fact, this is only the case where a tax return is filed before the 60-day deadline for the PDR passes. In practice, this will only be possible for disposals where the date of exchange is close to the end of a tax year.

HMRC has now confirmed that any outstanding PDRs should be filed using a paper return. You should contact HMRC to request this, or your accountant/tax advisor can do this if they hold a valid 64/8 for you.

Muir & Addy is a partnership registered to carry out audit work by the Institute of Chartered Accountants in Ireland (ICAI). Chartered Accountants Ireland is the operating name of ICAI.

Details of our audit registration can be viewed at www.auditregister.org.uk, under reference number 223287.

Chartered Accountants in Ireland (ICAI)