Are you aware of a key Capital Gains Tax (CGT) rule change? A CGT 30-day reporting scheme is now in force. It applies to gains made on residential properties. This is a fundamental change. Don’t get caught out.
The scheme applies to residential property disposals. It affects sales made on or after 6 April 2020. Your main home is exempt. Previously, tax due was dealt with via the self-assessment return. Often, taxpayers are in the dark. Many don’t realise that they need to file a report. And pay the CGT due.
Importantly, conveyancing solicitors have a role to play. Generally, they handle the administration and payment of stamp duty on property transactions. However, it’s vital that they consider whether the CGT 30-day reporting scheme applies.
Penalty for late filing
What if taxpayers miss the deadline? HM Revenue & Customs (HMRC) will likely charge a penalty. It has already collected £1.3million in fines.
Sometimes, clients notify us in advance. They tell us they are selling a buy-to-let property. In such instances, we can highlight the tax implications. Often, however, we’re not involved until after the sale. The issue then, is the timescale. First, taxpayers have to set up a dedicated CGT account.
You must report CGT online. This means creating a Capital Gains Tax on UK property account. Guidance is available on the GOV.UK website.
Does the CGT 30-day reporting scheme apply?
You may not have to report a property disposal. And pay CGT within the 30-day limit. There are exemptions for gains from a principal primary residence. This is your main home. Also, exemptions apply to digitally excluded taxpayers.
Check out the IACEW Tax Faculty’s guide about the CGT 30-day reporting scheme.
Specialist tax advisers
Confused about your responsibilities under the CGT 30-day reporting scheme? We can help. Call our tax advisers on 01785 243276.