What's the capital gains tax deadline on a property that does not qualify for relief?

I act for a buy-to-let landlord selling a UK residential property on which capital gains tax (CGT) is expected to be due. I’ve been told that the deadline for paying CGT on properties that do not qualify for relief as the seller’s principal private residence changed in April 2020. Is this correct?

From 6 April 2020, schedule 2 of the Finance Act 2019 requires UK residents to report and pay CGT due to HM Revenue and Customs (HMRC) within 30 days of completion of the disposal of UK residential property.

Failure to do so may result in a penalty, as well as liability for interest on any sum due.

Where it’s not possible to know the final CGT liability at the 30-day date, for example, because information necessary to determine it is not known at that point, a ‘reasonable estimate’ may be used (with any balance of CGT due by 31 January following the end of the tax year in which the disposal took place).

This represents a fundamental change in the administration of CGT payments, which previously only required UK residents to inform HMRC of the disposal in their annual Self-Assessment Tax Return.

The coronavirus-related grace period for CGT came to an end on 31 July 2020.

For more information, read the government’s guidance on:

Disclaimer

While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.

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