Residential property owners have had their fair share of tax changes recently, however there is a further matter on the horizon which seems to have gone under the radar with less than 6 months until the rule change comes into effect.
As of 6 April 2020, CGT due on residential property disposals will be payable within 30 days of the completion date. This is another step by the government to accelerate tax payment dates for Capital Gains Tax due on gains arising from UK property.
Currently, it can take up to 22 months between making a capital gain and actually paying the CGT due. CGT is currently payable by 31 January of the tax year following the year of disposal. Therefore, the CGT arising from a gain made by a UK resident individual on 6 April 2019 will be payable by 31 January 2021.
Individuals, trustees and personal representatives realising a taxable capital gain for the sale or other disposal of UK residential property will have to make a 'residential property return' within 30 days of completion. A residential property return is not required where the capital gain is not taxable for example if it is covered by main residence relief.
Taxpayers selling residential property after 6 April 2020 are going to have to be extremely well organised to ensure they meet the 30-day deadline otherwise they will be subject to interest and penalties. The danger is that people may be unaware of their tax obligation and short payment/reporting deadline due to the lack of publicity.
It is therefore important that you have a Chartered Accountant to deal with such matters, and to tell them about disposals immediately, before it is too late. For more information regarding these tax changes, please get in touch with us.
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