HM Revenue and Customs (HMRC) has issued a reminder that, from 6 April 2020, the deadlines changed for paying capital gains tax (CGT), after selling a residential property in the UK.

From 6 April, any UK resident individual must now tell HMRC in cases where CGT is due and pay within 30 days from completion.

HMRC has issued the following reminders about the changes.

  • From 6 April 2020, the deadlines changed for filing and paying CGT on the disposal of an interest in UK residential property by UK residents. From then, anyone who disposes of a UK residential property, that isn’t their main home and makes a capital gain where there is tax to pay, must tell HMRC and pay the CGT due within 30 days of completion.
  • This doesn’t apply if the residential property is the person’s main home and it’s been used solely as their private residence during the time it was owned. This is because the disposal will be covered by Private Residence Relief (PRR).
  • The rules also changed for non-UK residents notifying HMRC of a disposal of both UK residential and non-residential property regardless of whether there is a gain or not.
  • Non-UK residents are still required to notify HMRC of the disposal via the online service but will not be able to defer any payment due to the Self-Assessment Tax Return.
  • If someone doesn’t report gains on property within the 30-day time limit they may be liable to a late filing penalty, and if the tax is not paid within the same time limit, they may have a late payment penalty and be subject to late payment interest.

This is a significant change for people who would previously only have had to enter the details on their self-assessment (SA) return and pay the tax due in line with the SA deadlines.

If you routinely advise clients who may be in a position where they have sold a UK residential property which attracts a CGT charge, please consider whether you need to update any information that you provide them to reflect the changes.