Important changes to Capital Gains Tax

From 6^th April 2020, all Capital Gains Tax (CGT) due following the disposal of a residential property will have to be paid within 30 days of the completion date. The new rules will affect individuals, trustees and personal representatives. Failure to pay on time will result in HMRC imposing interest and potential penalties. It’s important to note that this new deadline will apply even where no money has changed hands – eg when a property is gifted to a member of the family or put into trust.​

At the moment, as a taxpayer you report any CGT due on your self-assessment tax return, with the tax being due by 31^st January following the year in which the gain was made. While your main residence is usually exempt from CGT, if you had sold your second property on 6^th April this year (2019) you would have reported this on your 2019/20 tax return, with the tax being due by 31^st January 2021. If you sell and complete on a second property on 6^th April of next year (2020), the CGT due on your sale will be payable just 30 days later, ie by 6^th May 2020. As you can appreciate, this is a significant change…​

An individual with little or no previous experience of CGT is at risk of falling foul of the HMRC with this change. With many people seeing their financial advisor just once a year for their review, we hope that HMRC will continue to actively raise awareness of this change before the 6^th April deadline.