There were many changes with capital gains tax in the past few years but most changes only applied to non-resident landlords.
From 6 April 2020, when CGT is due on the disposal of residential property a return must be filed and "notional CGT" paid within 30 days of completion. This is a major change!
The changes
A number of fundamental changes in relation to capital gains tax are anticipated with effect from 6 April 2020 including:
- Reduction in final period exemption from 18 to 9 months
- Restriction of letting relief to periods of co-occupation between tenant and landlord
- Extension of PPR relief for certain inter-spouse transfers
- Reduced deadline for reporting capital gains and paying capital gains tax on sales of residential property
This article concerns the last of these changes.
What is the current position ?
Property owners will be used to having a minimum of 10 months and a maximum of 22 months between incurring a capital gain on the sale of a residential property and reporting the disposal to HMRC and paying the tax. This has been the case since self-assessment was introduced in 1997.
With effect from 6 April 2020, the deadline is shortened to just 30 days, which brings the regime into line with the deadlines which were introduced for non-residents selling residential property after 6 April 2015, and both residential and commercial property after 6 April 2019.
Who does this affect ?
The new rules affect UK resident individuals, trustees and personal representatives who sell or otherwise dispose of residential property. This article concentrates on disposals by individuals. The rules do not extend to disposals by limited companies.