HMRC announce more time for 30-day reporting of CGT

CGT on disposals of UK residential property

Few property transactions are proceeding at the moment but anyone selling UK residential property needs to be aware of the new requirements. Under the new proposals, the CGT due should now be reported to HMRC and paid within 30 days of completion.

The new obligation applies to UK residential property transactions where: 

  • the date of disposal (usually the date of exchange) is on or after 6 April 2020 and
  • CGT is due. UK residents do not need to report transactions where no tax is due because of the availability of reliefs (for example, private residence relief, annual exempt amount etc.). Non-UK residents continue to need to report transactions even if no tax is due.

HMRC has, however, just announced that it will not charge late filing penalties for CGT returns made by 31 July 2020, on disposals of UK residential property by UK residents.

HMRC has stated:

“To help those selling properties familiarise themselves with the change in the rules and a new on-line process, HMRC is allowing a period of time to adjust and will not issue late filing penalties for CGT payment on account returns received late up to and including 31 July 2020. 

“For UK residents, this means transactions completed between 6 April 2020 and 30 June 2020 and reported up to 31 July 2020.

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

“Interest will accrue if the tax remains unpaid after 30 days.”

It is understood that although more time has been allowed for reporting purposes and late filing penalties will not be charged, interest will still accrue on the CGT that is due, so filing and paying as soon as possible is still recommended.

The easement appears to apply to UK residents only, as the reporting of such CGT property transactions for non-residents has been in force since April 2015. Late filing penalties for non-residents will therefore likely to continue to apply.

You can find more information from HMRC here

Coronavirus (COVID-19), Property Investment and Development

About the author

Simon is the Tax Director at Ward Williams and has more than 20 years of practical experience working in the tax profession.

 

Specialising in personal tax, Simon qualified as a Tax Technician in 2007, having been awarded with the Ivison medal for attaining the highest mark in the Personal Taxation paper in 2006.

 

As department head, Simon oversees the tax team across the Ward Williams group, whilst managing a diverse portfolio of clients including high net worth individuals, doctors, directors of owner managed businesses, partnerships and sole traders.

simon.boxall@wardwilliams.co.uk

01895 236335