NEWS

New CGT rules for residential properties

New rules being introduced next year will affect landlords looking to sell their residential property lets or UK residents with second homes.

From 6 April 2020 all UK residents disposing of UK residential property will need to submit a capital gains tax (CGT) return to HMRC within 30 days of the completion of the disposal, and a payment on account of the full calculated CGT liability will be payable within the same 30 day window.

This marks a significant change from the current requirement for the liability to be declared through self-assessment tax returns and payable by 31 January following the tax year in which the gain arises.

The changes to do not apply where the gain is not chargeable to CGT, such as where the gain is covered by private residence relief (where the property has been the individual’s only/main residence for the entire period of ownership).

The calculation of the amount payable will take into account an individual’s annual exemption and any unused losses that may be available.  A ‘reasonable estimate’ of the individual’s income for the year will need to be made in order to calculate the CGT liability.

If you are thinking of selling a chargeable property you may wish to consider doing so earlier to give yourself additional time to pay the CGT.  Please contact Paul Underwood on tel: 023 9248 4356 or email: pu@morriscrocker.co.uk if you need advice in this respect.

21/01/2020