In April 2020, new rules were brought in concerning the payment of Capital Gains Tax (CGT) on UK residential properties.
What do I have to pay CGT on?
If you live in the UK, you may need report and pay CGT when you sell:
- a property that you’ve not used as your main residence
- a holiday home
- a property which you rent out.
You will not have to report and pay CGT when:
- you meet the criteria for full Private Residence Relief
- the sale or disposal was made to a spouse or civil partner
- the gains are within your tax free allowance (Annual Exempt Amount)
- you sold the propertyfor a loss
- the property is not in the UK.
UK residents selling residential property and making a gain which is liable to CGT now have 30 calendar days from the date of completion to tell HMRC and pay any CGT owed.
What about Non-UK residents?
Sellers who do not reside in the UK must continue to report sales of UK property or land (whether or not there is CGT to pay) within 30 days of completion. There is no longer an option to defer payment of CGT via a Self-Assessment tax return.
How do I declare my CGT?
Previously, CGT was declared via a Self-Assessment Return. Now you report the CGT via an online property disposal return and that needs to be filed within 30 days of completion. If the property is jointly owned, each owner will have to submit a return.
If you are reporting a ‘one off’ disposal and you have no other reason to complete a Self-Assessment Return at the end of the tax year, you no longer need to register for self-assessment solely to report a residential property sale.
What if I miss the 30-day deadline?
If you don’t tell HMRC about any CGT within 30 days of completion, you will receive a penalty and will have to pay interest on what you owe.
If you are unsure of your tax position, please feel free to contact us as the rules concerning CGT can be complicated. If you would like any legal assistance, get in touch with Rosie Peters in our Wills, Trusts & Probate team in Swindon on 01793 522688 or email@example.com.