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28th May 2020

Property Investors and Capital Gains Tax

The new rules for property investors and Capital Gains Tax.

Property Investors and Capital Gains Tax

For the 2020/21 tax year, HMRC have introduced a strict new regime for property investors and capital gains tax when reporting on the sale of a residential property.

Here are the main rules for property investors and Capital Gains Tax:

You now have 30 days from the date of completion to:

  1. Report the disposal of a UK residential property and
  2. Pay any tax due

This is effective from 6 April 2020. Because there is a tight time-scale, reasonable estimates will be allowed.

Non-UK property and property held in non-UK companies are excluded from this system.

So, if you have a holiday home in Marbella, or your company is registered in the Cayman Islands, normal tax rules apply.

As you would expect, there are fines and penalties for late submission and/or late payment of tax.

However:

  • There are no penalties for late reporting on completions up to 1st July 2020 reported by 31st July 2020
  • Late filing penalties will be imposed for completions from 1 st July 2020 not reported in 30 days
  • Interest will be payable on all tax not paid in 30 days
  • In order to report the gains, taxpayers will need to create a CGT on UK Property Account through HMRC’s online services. This will have to be done through your own Government Gateway account with you own user ID

As always, Finton Doyle will be on hand to assist any clients with setting up and calculating taxes due.

Please note that this doesn’t include commercial property, and because your main home (Principal Private Residence) is exempt there’s no need to report these under the new system. Commercial property gains will continue to be reported on your self-assessment return.

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