The payment deadline for Capital Gains Tax on the sale of residential property in the UK has changed. From the 6 April 2020, all UK and non-UK resident individuals who sell residential property in the UK must inform HMRC of the gain and pay any Capital Gains Tax due within 30 days of completion.
The 30-day deadline applies if you sell or otherwise dispose of a:
- Property that you’ve not used as your main home
- Holiday home
- Property which you let out for people to live in
- Property that you have inherited and have not used as your main home
The deadline will not apply if:
- A legally binding contract for the sale was made before the 6 April 2020
- You meet the criteria for full Principal 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 the Annual Exempt Amount
- You sold the property for a loss (non-UK residents must continue to report sales or disposals of interest in UK property or land, regardless of whether there is a Capital Gains Tax liability)
- The property is outside the UK
Failure to comply with the changes will result in penalties, and interest will accrue on the amount due. Due to Coronavirus (Covid-19) HMRC have advised there will be a ‘soft landing’ and they will not charge penalties for any transactions completed on or after 6 April 2020 until 30 June 2020. Transactions completed from 1 July 2020 will receive a late filing penalty if they are not reported within 30 days. It should be noted that interest will still be charged if the tax remains unpaid after 30 days for all transactions from 6 April 2020.
HMRC have launched a new online service where taxpayers can create a ‘Capital Gains Tax on UK Property account.’ This will allow individuals to report and pay any Capital Gains Tax owed. A Government Gateway user ID and password will be needed to set this up.
If you think you could be affected by the above changes or would like further information, please do not hesitate to contact us at DRG Chartered Accountants to speak to our team of tax specialists.
DISCLAIMER: This information is for guidance only, and professional advice should be obtained before acting on any information contained herein. We will not accept any responsibility for loss to any person as a result of action taken or refrained from in consequence of the contents of this publication.
