30 Day Payment Window for Capital Gains Tax on Residential Property Gains

Posted on 22nd November 2018 by Streets What's trending?


Image to represent 30 Day Payment Window for Capital Gains Tax on Residential Property Gains

The government has decided they would like tax to be paid much sooner in respect of capital gains that arise when a residential property, such as a second home or rental property, is sold. Therefore, a new 30-day payment and reporting deadline has been confirmed by the government.


Capital Gains Tax (CGT) is normally payable by 31 January following the end of the year of assessment in which the gain arose. For example, if the gain arises on 1 June 2018, the CGT is due on or before 31 January 2020.

HM Revenue & Customs has now confirmed that, for disposals made on or after 6 April 2020, UK residents will have to make a payment on account of the CGT due and submit a return within 30 days following the completion of a residential property disposal. For example, if the gain arises on 1 July 2020, the CGT will now be due on or before 30 July 2020.

These new payment and reporting deadlines apply to individuals, trustees and personal representatives of deceased persons who sell or otherwise dispose of residential property.

Taking any losses and annual exemptions into account, they will have to self-assess the calculation of the amount payable. The rate of CGT payable will be determined after making a reasonable estimate of the amount of taxable income for the year.

For disposals by UK residents, the new reporting and payment requirements will not apply where the gain on the disposal (or the total gain if more than one property is sold) is not chargeable to CGT. For example, if the gain is covered by private residence relief, unused losses or the annual exempt amount (currently, £11,700) you will not be required to report it as it will not be liable to CGT.

For non-UK residents the return and payment is already due within 30 days of the disposal being completed. This will now be extended to apply to direct and indirect disposals of all UK land made on or after 6 April 2019 (whether or not a gain arises).


No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.


Expert insight and news straight
to your inbox

Related Articles


Boost Your Restaurant's Cash Flow with These Top Tips!

Maintaining a healthy cash flow is crucial for the success of any restaurant. Here are five key strategies to get you started: Optimise Menu Prices Ensure your dishes are priced for both competitiveness and profitabilityStreamline InventoryReduce waste and free up cash by using smart inventory management techniquesNegotiate with SuppliersBetter terms ...


Property Finance - unlocking opportunities with confidence and support

Exploring, navigating and understanding the complex landscape of property finance options can not only be time consuming, but hard to understand with the diverse range of financing options that are available in the market. It is essential from the outset for business owners to carefully evaluate their financing and ...


Child Benefit Updates

You may have heard about the recent changes to the High Income Child Benefit Charge which were announced in the Spring Budget. This is something that will affect several of our clients, and the changes can influence whether claims are made for child benefit or whether those that ...


You might also be interested in...