Important changes to the deadlines for filing and paying CGT on the disposal of UK property

The previously anticipated changes to the payment of Capital Gains Tax are now in place.

As of 6th April, any UK resident who has sold or disposed of a UK residential property which isn’t the house where they normally live, may need to pay CGT.

In addition, non-UK residents must continue to report sales or disposals of interests in UK property or land regardless of whether there is a gain or not. This must be done within 30 calendar days and from 6 April 2020, payment cannot be deferred via a Self-Assessment return. You must also pay the CGT within 30 days.

CGT may be due following the sale of: –

  • a property that you’ve not used as your main home
  • a holiday home
  • a property which you let out for people to live in
  • a property that you’ve inherited and have not used as your main home

But you won’t have to make a report and make a payment when:

  • a legally binding contract for the sale was made before 6 April 2020
  • you meet the criteria for full Private Residence Relief
  • the sale or disposal was made to a spouse or civil partner
  • the gains (including any other chargeable residential property gains in the same tax year) are within your tax free allowance (called the Annual Exempt Amount)
  • you sold the property for a loss
  • the property is outside the UK

If there is CGT to pay, then you must tell HMRC about the gain and pay any CGT due within 30 calendar days from the date of completion.

This can be done using a new online service, which can be accessed here:  https://www.tax.service.gov.uk/capital-gains-tax-uk-property/start/report-pay-capital-gains-tax-uk-property

Failure to report and pay the CGT within 30 days will result in the issuing of a late filing penalty, however HMRC will not issue any such penalties until after 31st July, to allow familiarisation with the new process.

Transactions completed from 1 July 2020 onwards will receive a late filing penalty if they are not reported within 30 calendar days and interest will accrue if the tax remains unpaid after a further 30 days.

If you need assistance with regard to the new Capital Gains Tax changes, or any aspect of Tax Planning or Residential Property Law, we can help. Call 01254 672222, email us at enquiries@watsonramsbottom.com or complete our Online Contact Form and one of our experts will be in touch.

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