Changes to Capital Gains Tax

March 11, 2020

Don’t get caught out: Changes to Capital Gains Tax – UK Residential Property

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

Capital Gains Tax is calculated on the profit made when you sell your residential property, this will be chargeable at the higher rates of 18% and 28% depending on whether you are a basic or higher / additional rate tax payer.

What needs reporting?

You will need to report your disposal to HMRC if you dispose of:

A property that you’ve not used as your main home
A holiday home
A property which has been let out
A property you have inherited and not used as your main home

What doesn’t need reporting?

You won’t be required to report the following disposals:

A sale made before the 6th April 2020 (This will be due by the normal Self-Assessment deadline)
A property that has been your main home for the duration of ownership and qualifies for Private Residence Relief
A gain that falls within your Annual Exemption Allowance (£12,000 – 2019/20)
A property that was sold at a loss
A property that is outside the UK

How will my gain be reported?

HMRC will be launching a new online service which will allow tax payers / agents to report and pay any Capital Gains Tax due.

It’s important that your gains are reported within the 30 day window as HMRC may send you a penalty as well as charge interest on the tax due.

If you need any assistance calculating and reporting your gain to HMRC, please get in touch.

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