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  • Writer's pictureSally Charlesworth

Tax payable within 30 days of disposal of residential property - Are you ready?

I first wrote about this in June 2019, but with all the Covid-19 issues I am concerned that it has passed people by. The new legislation came in as expected on 6th April 2020 and is now in force.

If you are an individual, disposing of a residential property that is subject to capital gains tax, you must now submit and pay the new capital gains form and tax, within 30 days of completion of the sale. This is a significant change, previously it formed part of your personal tax return, and payment did not have to be made until the following January.

If you inherited a second property, own a rental property, holiday home, furnished holiday let, or your main residence was let out for a period of time, this could affect you.

You need to notify your accountant in plenty of time, preferably when the decision to market the property is first taken, to ensure the timescale can be met.

Even if your accountant already acts for you in a personal tax capacity - a separate authorisation will need to be obtained in order to submit the additional form. To do this you need to add 'capital gains tax on UK property' to your account through your personal government gateway - this will generate a code to pass to your accountant to allow them to act for you.

Even if you do not believe that tax will be payable, the calculation needs to be done to make sure this is the case.

A separate form will need to be done for each property disposal throughout the year. The self assessment tax return will then be used to summarise all the disposals and take care of any adjustments that need to be done.

In light of the current crisis - the government have indicated that there will be a lenient approach taken to late returns from 6th April - 30th June, so no late filing fees will be levied - however they haven't formally waived interest that could be due on any late payments, so it is still a matter of urgency to act swiftly.

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