Changes to Capital Gains Tax on Property Sales will only affect you if you sell or gift a residential property other than your main residence on or after 6 April 2020.
For such disposals it will be necessary to file a separate capital gains tax (CGT) return within 30 days of completion of the disposal and it will also be necessary to pay any capital gains tax within the same period. The capital gain will also need to be reported on the normal tax return filed after the end of the tax year and the tax already paid will be treated as paid on account of the final liability.
Capital losses can be taken into account and reasonable assumptions made when calculating the amount of the gain.
It is anticipated that this new procedure will mean paying the tax well in advance of the “old” dates.
A disposal is completed on 31 May 2020, the tax will be payable by 30 June 2020 under the new rules.
Under the old rules the tax would not be payable until 31 January 2022 (an acceleration of 19 months).
The new rules can apply to your main residence if you have not occupied the property as such throughout your period of ownership.
It was originally anticipated that the solicitor dealing with the property disposal would alert you to these new requirements. It is now understood that, in most cases, they will probably leave it to the client or their accountant to deal with the completion of the CGT return and the calculation of the tax. It is therefore very important that you let your accountant know immediately of any residential property disposal so that they enable you to comply with the 30-day deadline.
If you have any questions on this or any tax queries, feel free to call Amy on 01992 444466 or via email here
The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided above.