Following our previous update on 15th June 2020, please find below notable changes that have been released via gov.uk.

You may already be aware that the following changes effecting residential property owners have taken effect from 6 April 2020.

Capital Gains Tax (CGT) submission and payment deadline

Until now, reporting property disposals and paying any resulting CGT would not be due until the tax return deadline in the tax return period when the disposal took place.

For example:

Disposal: 25 July 2020 (tax year 2020/2021)
Current CGT reporting and payment deadline: 31 January 2022

With effect from 6 April 2020, disposals of UK residential property on which CGT is due, will require to be reported and any resulting CGT due, paid within 30 days on the disposal.

The 30 day period will start from the disposal completion date and not from the date the contracts exchanged.

Working example:

Disposal (completion date): 25 July 2020
CGT reporting and payment deadline: 25 August 2020

This change will mainly effect those UK residents selling a second home or rental property where principal private residence (PPR) is not available.
You must include capital gains on your tax return, even if you’ve already reported and paid them.

Non-UK residents must continue to report sales or disposals of interests in UK property or land, regardless of whether there is a CGT liability within 30 days of completion of the disposal.

Reporting to HMRC

Before you report, you’ll need:

• Government Gateway user ID and password
• Calculations for each capital gain or loss you report
• Information from your records about the costs and what you received (the ‘proceeds’) for each asset
• Any other relevant details, such as any reliefs you’re entitled to

You can report CGT you need to pay:

• Using the Capital Gains Tax on UK property service within 30 days of selling UK property
• Straight away using the ‘real time’ Capital Gains Tax service

Due to coronavirus (COVID-19), UK residents will not get a late filing penalty for any transactions completed on or after 6 April 2020 to 1 July 2020 and reported up to 31 July 2020.

Transactions completed from 1 July 2020 will receive a late filing penalty if they are not reported within 30 calendar days.

Interest will be charged if the tax remains unpaid after 30 days for all transactions from 6 April 2020.

Agent Authorisation

Lishmans can manage your Capital Gains Tax on UK property account and send a CGT return on your behalf.

To do so, you will need to authorise us to manage your Capital Gains Tax on UK property account by:

• Creating a Government Gateway user ID (if you do not have one)
• Sign in and create a Capital Gains Tax on UK property account
• Giving us your account number
• Giving us your UK postcode or country of residence (these details must match their Capital Gains Tax on UK property account details)

Please get in touch if you wish us to undertake your CGT return on your behalf.