UK and International Tax news

HMRC Issues Consultation On Proposed Changes To CGT Payment Date For Residential Property Gains

Monday 30th April 2018

HMRC has launched a consultation on the introduction of a requirement to pay capital gains tax due on the disposal of residential property within 30 days of the completion of the disposal.

UK resident taxpayers currently pay CGT due on gains realised on the sale of residential property between 10 and 22 months after the sale is made.

In 2015, the government announced that it will introduce from April 2019 a requirement that CGT due on gains from selling residential property be paid within 30 days of the sale being completed. This will be a ‘payment on account’ towards the taxpayer’s tax liability for the relevant tax year in which the disposal is made.

In the 2017 Autumn Budget, the government made a further announcement that the introduction will be deferred until April 2020.

With a payment on account of CGT falling due within 30 days of the completion of the disposal, a special payment on account return confirming the disposal and the amount payable will also need to be sent to HMRC at the same time.

The changes will mainly affect those disposing of a second home or rental property. They will not apply where the gains are not chargeable to CGT (for example, where the gains are covered by private residence relief).

The existing CGT payment on account system for non residents disposing of UK residential property will be extended from April 2020 so that a payment will be due where a person also makes self-assessment returns to HMRC.

This is a technical consultation on the proposals and comments are invited by 6 June 2018.

If you would like further information on the consultation, please contact Keith Rushen on 0207 486 2378.

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