Special warning of 30-day CGT payment deadline for property disposals
HMRC is taking special care to ensure that taxpayers are aware of new rules taking effect in April 2020, under which the capital gains tax bill on residential property disposals has to be paid within 30 days of completion.
Currently, CGT due on property disposals does not have to be reported or paid until the deadline for submitting a self-assessment form, which can potentially be up to 22 months after the disposal took place. The changes mainly affect those selling a second home or rental property on which private residence relief is not available. They will apply to UK residential properties, even where property is gifted for no consideration.
Although two years' grace has been allowed between the announcement and the implementation of the new time-window, it is likely that many taxpayers, especially holiday home owners and small-scale landlords, will not be aware of them in time. HMRC wants to avoid a repeat of the recent cases in which late-filing penalties imposed on non-resident sellers of UK property have been overturned at tribunal because the reporting regime had not been sufficiently well publicised.
It has now published a report of research conducted to find out how best it can warn taxpayers of the new 30-day payment window before it affects them.
More details are available in the STEP article at the link below.