Introduced in April 2020, there is a new requirement for UK residents to report and pay capital gains tax (CGT) on disposals of UK residential properties. This is a new requirement for UK residents as non-residents have had an obligation to pay this since 2015. In our latest article, the team at Kirkwood Wilson provide some guidance on reporting disposals to HMRC, specifically through their online system.
More information on the CGT 30-day reporting period
As of the 6th April 2020, HMRC introduced new rules regarding the reporting of CGT, Capital Gains Tax. These new rules were regarding the disposals of UK residential property and required both UK and non-UK residents to comply. As of the 6th April 2020, any gains of residential properties should be reported within 30 days.
As part of these new rules, individuals are required to register for their own Government Gateway account and set up an online account.
Reporting CGT
UK residents are now required to report gains on UK residential property, only in circumstances where tax is due. This can include:
A deemed disposal
A gift of a residential property
Or a disposal of a principal private residence that does not qualify for full relief.
It is important to note that the requirements for non-residents are wider and apply even where no tax is due.
On 19 August 2020, HMRC upgraded the system to allow gains on second and subsequent disposals to be reported online.
Previously the system could only be used for the first disposal in any tax year and subsequent disposals had to be reported on a paper return.
The system now also allows capacitors (those holding power of attorney) and personal representatives to report gains.
HMRC and CGT 30-day reporting
As stated by HMRC, due to coronavirus (Covid-19), they did not issue late penalties to any transactions completed between 6 April and 30 June 2020, provided the gain was reported and any tax due paid by 31 July 2020. Anyone who completes the sale of a property from 1 July 2020 onwards has 30 calendar days to report and pay the tax due.
Transactions completed from 1 July 2020 will receive a late filing penalty if they are not reported within 30 calendar days. Interest will be charged if the tax remains unpaid after 30 days for all transactions from 6 April 2020.
Kirkwood Wilson and financial advice
So, to sum up, any gains of residential properties since 6.4.20 should be reported within 30 days.
Here at Kirkwood Wilson, we are happy to help with any financial worries or concerns. If the announcement of the 30-day CGT reporting has confused you or is something you require some support with, do not hesitate to get in touch with us.
