From 6 April 2020 the Government is making some significant changes to the rules regarding the reporting and payment of Capital Gains Tax (CGT) when individuals, trustees and personal representatives dispose of residential property and it is important to be aware of these.
Currently such a disposal would be reportable on your tax return and any CGT liability payable by 31 January following the end of the tax year, so any CGT liability on a disposal in the current tax year ending 5 April 2020 is due for payment by 31 January 2021.
From 6 April 2020 the general rule will be that a return in respect of such a disposal must be delivered to HMRC within 30 days following the completion of the disposal, and a payment of the CGT liability made at the same time. As well as this being a very short deadline to calculate the gain arising, and iron out any issues, it reduces the payment date significantly. There are also restrictions on losses you can set against a taxable gain at the point of reporting, and a reasonable estimate of taxable income for the year will also be necessary. In certain circumstances a return can be amended at a later date, otherwise any repayment may have to wait until the tax return for the year is filed.
Failure to meet the 30-day deadline will result in late filing penalties.
The 30-day deadline does not apply where a gain is not chargeable to CGT, such as where a gain is covered by private residence relief.