Reminder of new Capital Gains Tax payment and reporting deadlines

The deadlines for paying capital gains tax (CGT) after selling (or otherwise disposing of) a residential property in the UK changed with effect from 6 April 2020.

From 6 April 2020, UK residents had to tell HM Revenue and Customs (HMRC) about any gain and pay the tax due within 30 days from completion.

The 30-day reporting and payment deadline was extended to 60 days with effect for completion dates on or after 27 October 2021.

This means that if the completion date for the disposal was:

between 6 April 2020 and 26 October 2021 – UK resident taxpayers had 30 days from the completion date to report and pay tax on a disposal of UK residential property that results in CGT to pay (generally speaking, where a gain is realised on disposal of a holiday home or other property in the UK that is not used as the taxpayer’s main home)
on or after 27 October 2021 – UK resident taxpayers have 60 days from the completion date to report and pay tax on a disposal of a UK residential property that results in CGT to pay

There are special rules for CGT reporting by non-residents disposing of UK property or land, who may have to submit a tax return even where there is no CGT to pay or where the property is not residential.

HMRC’s CGT guidance covers issues such as:

advice for agents
when CGT is payable on a property disposal
how to work out a taxable gain
how to report and pay the tax
changes for trusts – trustees and their advisers should also be aware of the tightened reporting and payment windows that they will face

Taxpayers can report and pay any tax due through HMRC’s online service.

HMRC letters to taxpayers

HMRC is writing ‘nudge letters’ to taxpayers who disposed of residential property in early 2021/22 but have not filed a CGT return.

From 21 March 2022, HMRC intends to write to taxpayers who, at the time of the property disposal, had 30 days to report and pay any CGT (taxpayers who disposed of the property in question before 27 October 2021).

The template letter asks taxpayers to:

consider whether they owe CGT in respect of the disposal and
file a late CGT on UK property disposal return if they are required to do so

It also asks taxpayers to contact HMRC if they do not believe they have CGT to pay or if they have already reported the property disposal to confirm they have checked their tax position.

See the template letter in HMRC’s briefing (PDF 135 KB)

Kindly shared by The Law Society of England and Wales

Main article photo courtesy of Pixabay