Capital Gains Tax on Residential Property is Changing

Background

Starting from April 2020, the way you report and pay capital gains tax (CGT) generated from residential property disposals will change.

Currently you are required to report any capital gains made from residential properties (not covered by PPR relief) on your Self Assessment (SA) returns. Therefore, it is important that you are aware of the changes coming into effect from 6 April 2020.

New Rules

On the completion of the disposal, you will have a maximum of 30 days to submit a calculation of the gain and pay the tax due. The calculation submitted will be a provisional one, with the correct gain declared on your SA return as normal. Any CGT not accounted for in the original payment is required to be paid by 31st January following the tax year.

Once you have submitted your figures within 30 days, no capital losses can reduce the CGT payable until you have submitted your SA return. This means where you have made capital losses after the property disposal, these can not be applied until the submission of your SA return.

Late payment and submission penalties will apply to the 30 day deadline therefore, it is as important as ever to ensure you are on time with your affairs.