REMINDER of the changes to Capital Gains Tax payment for UK property sales

The deadlines for paying Capital Gains Tax after selling a residential property in the UK changed from 6 April 2020 – understand the changes and what you need to do.

Source:    HM Revenue & Customs

From 6 April 2020, if you’re a UK resident and sell a residential property in the UK you’ll have 30 days to tell HMRC and pay any Capital Gains Tax owed.

If you don’t tell HMRC about any Capital Gains Tax within 30 days of completion, you may be sent a penalty as well as having to pay interest on what you owe – so it’s really important that everyone involved in the sale of a residential property fully understands these changes, which affect both UK and non-UK residents.

Capital Gains Tax

Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.

Read full guidance on Capital Gains Tax.

When you need to report Capital Gains Tax within 30 days

If you live in the UK, you may need report and pay Capital Gains Tax when, for example, you sell or otherwise dispose of:

  • a property that you’ve not used as your main home
  • a holiday home
  • a property which you let out for people to live in
  • a property that you’ve inherited and have not used as your main home
  • But you won’t have to make a report and make a payment when:
  • a legally binding contract for the sale was made before 6 April 2020
  • you meet the criteria for full Private Residence Relief
  • the sale or disposal was made to a spouse or civil partner
  • the gains (including any other chargeable residential property gains in the same tax year) are within your tax free allowance (called the Annual Exempt Amount)
  • you sold the property for a loss
  • the property is outside the UK

New online service and updated guidance

HMRC will launch a new online service to allow you to report and pay any Capital Gains Tax owed.

Guidance will be fully updated in April 2020, which will include information on how to access and use the online service.

Non-UK residents

If you’re a non-UK resident you must continue to report sales or disposals of interests in UK property or land, regardless of whether there is a Capital Gains Tax liability within 30 days of completion of the disposal.

You will no longer be able to defer payment of Capital Gains Tax via your Self-Assessment return, and any tax owed must be paid within the 30-day reporting and payment period.

This includes disposals of residential properties, non-residential properties and indirect disposals.

From 6 April 2020 non-UK residents will be able to use the new online service, which will replace the current reporting service.

Find out if you need to pay Capital Gains Tax if you’re not resident in the UK.

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