Landlord update – Capital Gains Tax – 30 day payment and reporting

There are changes to the capital gains tax (CGT)
deadline for reporting the sale of residential
property in the UK, and paying any CGT liability.
This will affect property you let out: though if you
have at any time occupied such property as your
main private residence, different rules may come
into play.

From 6 April 2020, sales must be reported to
HMRC, and any CGT paid, within 30 calendar
days of completion. Interest and penalties apply
if this is not done within the time limit. The rules
were eased in with a temporary exception to late
filing penalties, though this is about to expire.

For UK residents, the late filing easement covers
transactions completed between 6 April 2020 and
30 June 2020, and reported up to 31 July 2020.
Transactions completed from 1 July 2020, however,
will incur a late filing penalty if not reported within
30 calendar days. Interest accrues if tax is unpaid
after 30 days.

In the past, payment and reporting were made via
the self assessment tax return. A disposal in the
tax year ending 5 April 2020, for example, would
be reported on the tax return for 2019/20, due
for submission by 31 January 2021. Accelerating
the payment window obviously has considerable
consequences for cash flow, with the need for
funds to be in place to settle any liability. It also
means the immediate need for a CGT calculation,
even if the detail is subsequently refined in the self
assessment return.