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Changes to Paying Capital Gains Tax on Residential Property from 6 April

Date posted: 5th Feb 2020

From 6 April 2020, there is a major change in the reporting and payment of Capital Gains Tax on residential property disposals. From that date, it will be necessary to report the disposal of the property within 30 days of completion of the disposal and pay Capital Gains Tax on account to HMRC.

This will be a significant acceleration of the payment date as Capital Gains Tax is currently payable with income tax on 31 January following the end of the tax year. Hence, where completion of property disposal takes place on 1 April 2020 CGT will be due 31 January 2021. If however completion was delayed to 1 May 2020, CGT would need to be paid on 31 May 2020.

Note that the new 30-day reporting and payment obligation will not apply where no tax is payable such as the disposal of the taxpayers private residence.

 

DON’T BE LATE IN PAYING YOUR PERSONAL TAX BILL

Individual’s 2018/19 income tax, CGT, class 2 and 4 NIC liabilities should have been paid by 31 January 2020.

Note that if the balance is still unpaid at the end of February 2020 a 5% surcharge penalty is added in addition to the normal interest charge unless a time to pay arrangement has been agreed with HMRC.

 

If any of the updates in this article raise any issues for you or your business, please contact our Tax team.


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