CGT Changes to residential property disposals

Jon Stewart at Page Consulting has the following to say on the upcoming tax changes to residential property disposals:

“From 6 April 2020 it is proposed that a new 30-day reporting and payment window will come into effect for sales of residential property where a capital gains tax (CGT) charge arises.

HMRC will be expecting a standalone return to be submitted within 30 days of completion. In addition to this, payment of the CGT due will also be payable on the same day based on an estimated calculation of the gain. Various exclusions apply in relation to such reporting including disposals made on a no gain/no loss basis (for example, between spouses or civil partners).

Individuals that I think we be affected by this change are those that are selling a second home or rental property on which full relief for CGT is not available. The key to meeting the reporting obligations will be to consider the tax position early on in the process of selling the property. Individuals should engage with a tax professional in order to calculate the gains arising and consider whether any action could be taken to reduce the CGT exposure.

Taxpayers will be allowed to factor in realised capital losses and available reliefs into their calculations. If a capital loss arises after the disposal, but before the end of the tax year, a final adjustment to tax position can be made as part of the normal self assessment tax return submission.”