As of April 6^th 2020, the pre-existing deadlines in place for paying Capital Gains Tax following the sale of a residential property are changing in the UK. To be as prepared as possible, you need to understand these changes.

From the aforementioned date, you will have approximately 30 days to inform HMRC and pay owed Capital Gains Tax – if you are a UK resident selling a residential property in the country.

Should you fail to inform HMRC about your Capital Gains Tax within the 30-day post-completion window, you could receive a penalty and be made to pay interest on top of what you already owe. Because of these potential consequences, it is crucial that people fully comprehend the changes.

What is Capital Gains Tax?

Put simply, Capital Gains Tax is what you pay on any profit you make following the sale or disposal of an asset that’s value has increased.

You can view a more comprehensive guide on Capital Gains Tax on the Government’s website.

In these situations -you need to report Capital Gains Tax within 30 days

If you sell or dispose of any of the following, you might need to report on your Capital Gains Tax and make a payment:

• A property that hasn’t been used as your home
• A property used for holidays
• A property that you let out for others
• An inherited property that hasn’t been used as your home

However, you will not be required to report or pay if:

• A contract for sale was made prior to 6^th April 2020
• The Private Residence Relief criteria are met
• The sale was to a spouse or civil partner
• The profit gains fall within tax-free allowance
• The property was sold at a loss
• The property exists outside of the UK

Online Service to be Launched

HMRC are launching an online platform that lets you report on or pay any Capital Gains Tax owed by yourself.

Advice for Agents

Do you act as an agent for a person who is selling or disposing of residential property in the UK? If so, you need to:

• Register with Agent Service
• Ensure that Capital Gains Tax owed by any of your clients is reported and paid within the 30-day window following completion

If you’re a non-UK resident

Are you a non-UK resident? If so, you will need to carry on reporting the sale/disposal of any UK property and/or land. You must do this even if there is no Capital Gains Tax owed within the 30-day window following completion.

You will no longer be allowed to defer any Capital Gains payment you owe through a Self-Assessment return, and any you owe will have to be paid within the 30-day window.

Included in this is the disposal of residential property, non-residential and other disposals.

From April 6^th 2020, non-UK residents can use the new online platform, which is replacing the pre-existing reporting service.

If you are a non-UK resident, you can discover whether you need to pay Capital Gains Tax here.

What About Trusts?

Do you represent a Trust? If so, you will need to register at the Trust Registration Service. For existing Trusts, you can utilise your UTR in order to gain access to the new service.

If you represent a Trust for a UK-based resident who sells/disposes of UK residential property, you will need to make sure any Capital Gains Tax owed is reported & paid within the 30-day window following completion.

Similarly, if you represent a Trust for a non-UK resident who sells/disposes of UK residential property, you will need to make sure any Capital Gains Tax owed is reported & paid within the 30-day window following completion.