While the housing market took a hit during the early part of 2020 due to COVID-19, we’re slowly seeing the market recover as lockdown eases and people return to normality.
Anyone selling their home in the UK should be aware of the latest changes in Capital Gains Tax (CGT) rules recently introduced by HM Revenue & Customs (HMRC). From 7 April 2020, CGT due should be reported and paid within 30 days of completion.
This applies to UK residential property transactions which have a date of disposal on or after 6 April 2020 (this is typically the date of exchange) and CGT is due. There won’t be any tax due for UK residents where certain reliefs are available, such as private residence relief. In instances where there is no tax due, there is no need to report transactions. Non-UK residents will need to report transactions even if no tax is due.
To make the process easier, HMRC has launched a new service for taxpayers to report and pay CGT on UK property. Agents can also act on behalf of clients on a second dedicated portal where necessary. The report and payment are due 30 days from the date of completion, so, for example, if contracts are exchanged on 6 April and the contract is completed on the 17 April, the report and payment is due on 17 May.
If you’ve recently sold your house or plan to in the future and would like further clarification on the new CGT rules for residential properties, please contact our team.