Changes to Capital Gains Tax on the sale of residential properties

Due to the current global pandemic, an important change to the way Capital Gains Tax (CGT) on residential property is reported and paid may have gone unnoticed. With effect from 6 April 2020, where CGT is due following the disposal of residential property then it must be reported and paid to HMRC within 30 days of completion. Failure to file the Return will mean that a penalty will be incurred and interest will be added to the amount due.

There has been a slight concession made due to coronavirus (COVID-19), with HMRC announcing that you will not receive a late filing penalty for any transactions completed on or after 6 April 2020 but before 1 July 2020 and reported up to 31 July 2020.

Transactions completed from 1 July 2020 will receive a late filing penalty if they are not reported within 30 calendar days.

Interest will be charged if the tax remains unpaid after 30 days for all transactions from 6 April 2020.

How to report and pay the tax

You’ll need to create a Capital Gains Tax on UK property account in order to report the sale to HMRC. This is done using your Government Gateway or can be completed by an agent acting on behalf of a client. Do not assume that your solicitor or conveyancer will prepare the Return for you. Solicitors and conveyancers may not be prepared, or offer, to deal with the CGT return or may not have the capability to navigate the complex CGT rules and exemptions. 

If you have sold, or are thinking of selling, a residential property on which CGT may be due The TAX Partnership can assist with the calculation of the Capital Gains Tax ensuring that all available reliefs are claimed to keep the tax due to a minimum. We can also prepare and file the new Capital Gains Tax Return on your behalf. Please contact us for more details.