A significant change to the reporting of residential property sales took effect from 6 April 2020, which brings forward the deadline for submitting a return to HMRC. With the property market expected to pick up soon, an awareness of the new rules is important.
The key points are:
- Direct and indirect disposals of UK residential property or land must now be reported to HMRC and any tax paid within 30 days of completion.
- The new reporting deadline applies where contracts are exchanged after 5 April 2020 (care should be taken where the contract is conditional).
- For UK residents, reporting is only required where there is a capital gains tax liability.
- Non-residents are still required to report all disposals, regardless of whether any tax is due.
- The disposal must be reported online and the return can be filed by the taxpayer or their agent.
- In either case, the taxpayer will need a Government Gateway account and a new 'Capital Gains Tax on UK Property' account.
- The tax paid will be treated as a payment on account towards the liability for the year, as the return may include estimated figures.
- The gain will also need to be reported on a self assessment tax return following the end of the tax year (unless it is a one-off disposal and the taxpayer has no other income to report).
- HMRC will not issue late filing penalties for disposals completed up to 1 July 2020, but any tax due must still be paid on time.
If you or a client need to file a return and require assistance, please get in touch and we would be pleased to help.