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HMRC reminder of changes to capital gains tax for UK residential property
HM Revenue and Customs (HMRC) has issued a reminder that the deadlines for paying capital gains tax (CGT), where there is a liability to do so, after selling a residential property in the UK changed from 6 April 2020.
From 6 April, any UK resident individual must now tell HMRC in cases where CGT is due and pay within 30 days from completion.
HMRC previously published information about this change, including:
- when you need to report CGT within 30 days
- the online service set up on 6 April allowing UK and non-UK residents to report and pay any relevant CGT liability
- the amended rules for reporting and paying CGT for non-UK residents disposing of UK property or land (including non-residential UK property)
- advice for agents
- trusts – trustees and their advisers should also be aware of the tightened reporting and payment windows that they will face
Further information can be found on GOV.UK.
HMRC has issued the following reminders about the changes:
- from 6 April 2020 the deadlines for filing and paying CGT on the disposal of an interest in UK residential property by UK residents changed. From then, anyone who disposes of a UK residential property that isn’t their main home, and makes a capital gain where there is tax to pay, must tell HMRC and pay the CGT due within 30 days of completion
- this doesn’t apply if the residential property is the person’s main home and it’s been used solely as their private residence during the time it was owned, because the disposal will be covered by Private Residence Relief (PRR)
- the rules also changed for non-UK residents notifying HMRC of a disposal of both UK residential and non-residential property regardless of whether there is a gain or not
- non-UK residents are still required to notify HMRC of the disposal via the online service but will not be able to defer any payment due to the self-assessment tax return
- if someone does not report gains on property within the 30-day time limit they may be liable to a late filing penalty, and if the tax is not paid within the same time limit, they may have a late payment penalty and be subject to late payment interest
This is a significant change for people who would previously only have had to enter the details on their self-assessment return and pay the tax due in line with the self-assessment deadlines.
If you routinely advise clients who may be in a position where they have sold a UK residential property which attracts a CGT charge, consider whether you need to update any information that you give them to reflect the changes.