Capital gains changes for residential sales

Changes in capital gains tax (CGT) are effective from 6 April 2020 and those selling residential property in the UK will be required to report the disposal to HMRC and pay the tax due within 30 days of completion.

Current ruling allows UK residents between 10 and 22 months to declare any taxable gain under the self-assessment system, depending on when in the tax year the disposal is made.

The measure was originally announced in the Autumn Statement 2015 but was deferred in the 2017 Budget until April 2020.

The new rules will affect UK resident individuals, trustees and personal representatives of deceased persons who dispose of residential property where there is a liability to CGT.

There is no need to report when the gain is covered by:

  • Private residence relief
  • Unused losses
  • Annual exemption

The rate of CGT will differ for each individual dependant on the level of income in the tax year and you may need to estimate the income for the tax year to calculate the CGT payable.

Those selling residential property will be required to report the disposal to HMRC

You should speak with a tax advisor if you are disposing of a residential property after April 2020 as you may not have much time. Dates have never been as important.

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