What Are the Penalties for Missing the 60-Day Property CGT Deadline?

At Towerstone, we provide specialist capital gains accountancy services for property sellers. We have written this article to explain penalties and interest for late CGT reporting, helping you make informed decisions.

From experience, the 60-day Capital Gains Tax deadline for UK property is one of the most commonly missed tax obligations I deal with, and in my opinion it is also one of the most misunderstood. Many people simply do not realise the rule exists until it is too late. Others know about it in vague terms but assume it works like Self Assessment, where everything is sorted months later. Unfortunately, HMRC does not see it that way.

If you sell or dispose of a UK residential property and Capital Gains Tax is due, you are usually required to report the disposal and pay the tax within 60 days of completion. Missing that deadline can trigger automatic penalties, interest, and in some cases further behaviour-based penalties if the situation is not corrected promptly.

In this article, I am going to explain clearly what the 60-day CGT rule is, who it applies to, what penalties arise if you miss it, how those penalties build up over time, and what you should do if you realise you are already late. Everything here is based on how HMRC applies the rules in practice and what I see when clients come to me after the sale has already completed.

By the end, you should understand exactly what the risks are and how to deal with them calmly rather than letting the problem snowball.

A quick reminder of the 60-day CGT rule

The 60-day CGT rule applies to disposals of UK residential property where Capital Gains Tax is payable.

In broad terms, you must:

Report the disposal to HMRC within 60 days of completion

Pay the estimated Capital Gains Tax within the same 60 days

This is done using HMRC’s online UK Property Account, not through your normal Self Assessment return at that stage.

From experience, this is where people go wrong. They assume telling their accountant at year end or including it on the next tax return is enough. It is not.

The 60-day requirement exists in addition to Self Assessment, not instead of it.

Who does the 60-day deadline apply to?

The deadline applies to UK residents and non-residents alike, provided the disposal involves UK residential property and a gain arises.

From experience, it commonly affects:

Individuals selling buy-to-let properties

Individuals selling second homes or holiday homes

People who lived in a property for part of the time but not all of it

Executors and trustees selling residential property

People transferring property to someone else at market value

It does not usually apply where the property sale is fully covered by Private Residence Relief, meaning no CGT is due at all. However, assuming relief applies without checking is a common and expensive mistake.

Why this deadline catches so many people out

In my opinion, the problem is not complexity, it is expectation.

For decades, property gains were reported and paid through Self Assessment months after the tax year ended. The 60-day rule changed that, but many people still think in the old way.

The most common things I hear are:

I thought my solicitor handled the tax

I assumed it would go on my tax return

I didn’t know any tax was due until later

I didn’t have the cash yet

None of these stop penalties from applying.

What happens the moment you miss the 60-day deadline

The penalties for missing the 60-day property CGT deadline follow the Self Assessment late filing framework, but they apply to the property CGT return, not your main tax return.

As soon as the deadline is missed:

An automatic fixed penalty is charged

Interest starts running on the unpaid tax

From experience, people are often unaware of the penalty until they try to submit the return late and see it added automatically.

The initial late filing penalty

If you miss the 60-day deadline, HMRC charges an automatic £100 late filing penalty.

This applies even if:

You submit the return one day late

The tax due is relatively small

You intended to deal with it later

In my opinion, this fixed penalty feels harsh, but it is applied consistently and automatically.

Daily penalties if the delay continues

If the return remains outstanding for more than three months after the deadline, further penalties can apply.

HMRC may charge:

Daily penalties of £10 per day

Capped at a maximum of £900

From experience, this stage is often missed because people do not realise daily penalties are accruing until the amount becomes significant.

At this point, a missed 60-day deadline can already be costing over £1,000 in penalties alone.

Six-month penalties for prolonged delays

If the property CGT return is still not submitted six months after the deadline, an additional penalty can apply.

This is usually:

The greater of £300 or

5 percent of the Capital Gains Tax due

In my opinion, this is where the problem starts to feel serious, particularly if the tax due was already substantial.

Twelve-month penalties for long-term non-compliance

If the return is still outstanding twelve months after the deadline, another penalty can be charged.

Again, this is usually:

The greater of £300 or

A further 5 percent of the tax due

At this stage, the penalties alone can run into several thousand pounds, before interest is even considered.

Late payment penalties and interest

Late filing penalties are only part of the picture.

If you miss the 60-day deadline, the tax itself is also late, which means interest starts running from day one after the deadline.

In addition to interest, HMRC may charge late payment penalties if the tax remains unpaid for an extended period.

From experience, the combination of filing penalties, payment penalties, and interest is what really shocks people when they finally see the total cost of delay.

Why interest matters more than people expect

Interest is often dismissed as small, but over time it adds up.

Interest accrues daily on unpaid Capital Gains Tax until it is paid in full. If a gain is large and the delay is long, interest alone can be painful.

In my opinion, interest is HMRC’s way of ensuring delay never works in the taxpayer’s favour.

What if you file late but pay on time?

This does happen occasionally.

If you miss the reporting deadline but pay the estimated tax within 60 days, you may still face late filing penalties but avoid late payment penalties and interest.

From experience, this is uncommon because most people discover the obligation only after both deadlines have passed.

What if you pay late but file on time?

This scenario can also occur.

You may submit the property CGT return within 60 days but delay payment.

In this case:

Late filing penalties may be avoided

Late payment penalties and interest can still apply

In my opinion, paying something is always better than paying nothing, even if you cannot pay the full amount immediately.

Reasonable excuse and appeals

Penalties are not always final.

You can appeal penalties if you have a reasonable excuse for missing the deadline.

From experience, reasonable excuses are narrowly interpreted. They usually involve:

Serious illness

Bereavement

Unexpected events that genuinely prevented compliance

Lack of awareness of the rule, reliance on a solicitor, or being busy are not normally accepted as reasonable excuses.

Appeals should be made promptly and supported with evidence.

Behaviour-based penalties in more serious cases

In some cases, HMRC may go beyond automatic penalties and consider behaviour-based penalties.

This is more likely where:

The disposal was deliberately not reported

HMRC had to prompt the disclosure

There is a pattern of non-compliance

From experience, most missed 60-day cases are treated as careless rather than deliberate, but delay after discovery can change HMRC’s view.

How this interacts with Self Assessment

The 60-day return does not replace Self Assessment.

You still need to:

Include the disposal on your annual tax return

Reconcile the gain with your final CGT position

Adjust for allowances and income levels if necessary

If the 60-day return is wrong or incomplete, that can also create inaccuracy penalties later.

In my opinion, treating the 60-day return as provisional and forgetting about it is a mistake.

What I advise if you have already missed the deadline

From experience, the worst thing you can do is nothing.

If you realise you have missed the 60-day deadline, my advice is always:

File the property CGT return as soon as possible

Pay the tax as soon as you can

Deal with penalties head-on rather than ignoring them

Appeal only where you have a genuine reasonable excuse

The sooner you act, the more penalties you stop from accruing.

A realistic example from experience

I regularly see cases like this:

A landlord sells a rental property. Completion takes place in May. They assume everything will be dealt with at tax return time. In the following February, they speak to an accountant who explains the 60-day rule.

By then:

The £100 penalty has applied

Daily penalties have been charged

A six-month penalty may already be due

Interest has been running for months

The tax itself might be manageable, but the penalties feel disproportionate simply because the rule was missed.

Can penalties be reduced?

Sometimes, yes.

Penalties may be reduced where:

You act quickly once aware

You cooperate fully

You provide complete and accurate information

In my opinion, HMRC is far more receptive to engagement than avoidance.

How to avoid this problem entirely

The simplest way to avoid penalties is to plan early.

From experience, this means:

Checking CGT exposure before exchange of contracts

Knowing whether Private Residence Relief applies

Having cash available for tax

Creating a UK Property Account in advance

If the tax is planned for, the 60-day deadline becomes an administrative step rather than a crisis.

Where this leaves you

Missing the 60-day property CGT deadline can be expensive, even where the underlying tax is relatively modest. Automatic penalties apply quickly, daily penalties can follow, and further charges arise if the delay continues. Interest runs throughout, and HMRC does not pause the clock because someone was unaware of the rule.

From experience, the biggest cost is rarely the tax itself. It is the combination of delay, penalties, and stress that comes from realising the mistake too late.

In my professional opinion, if you have missed the deadline, dealing with it immediately is always the cheapest and least painful option. If you are planning a property sale, understanding the 60-day rule in advance can save you thousands and turn a potential problem into a straightforward compliance exercise.

If you would like to explore related Capital Gains Tax guidance, you may find What counts as a capital gain and what does not and What happens if I gift a property to a family member useful. For broader Capital Gains Tax guidance, visit our Capital Gains Tax hub.