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Capital Gain Tax payable on disposal of properties

Capital Gain Tax payable on disposal of properties since 6 April 2020

Capital Gains Tax (CGT) 30-day reporting

It have previously been reported a new system for paying and declaring CGT within 30 days of the completion of a UK property transaction. In spite of the coronavirus crisis, this new reporting procedure and deadline came into effect for property completions on and after 6 April 2020.

There are exceptions from the 30-day regime for transactions where there is a loss, the gain is fully covered by a CGT relief or annual exemption, and where the contracts were exchanged in 2019/2020. Otherwise if the CGT is not reported and paid within 30 days of completion, late filing penalties will be imposed in the same manner as for late SA tax returns.

Fortunately, HMRC has introduced a soft landing for the new CGT regime, such that disposals made from 6 April to 30 June 2020 inclusive can be reported by 31 July 2020 with no penalties due. However, transactions completed on or after 1 July 2020 must be reported within 30 days through the taxpayer’s “CGT on UK property account”.

Accountants can operate this account on behalf of their client, but the client needs to set it up through their own Government Gateway. They also need to separately authorise their accountants to report transactions through the property account, and need to do this through their Agents Services Account (ASA) that is up and running to accept that authorisation.

If you are digitally excluded, and so can’t report online, you may be able to persuade HMRC to issue a paper form, ring: 0300 200 3300. If there is more than one property transaction in the tax year, you may have to use that paper route to report the second and subsequent disposals.

There are numerous problems with this CGT reporting system which we will look at in future newsletters. For now, remember your conveyancing solicitor is very unlikely to deal with the CGT reporting, so it will be down to you to avoid any penalties arising.

Soft landing for CGT 30-day filing

How to report and pay CGT on property

How to manage the CGT on UK property account