If you are a UK resident and you are selling your residential property on or after 6th April 2020, any Capital Gains Tax due will have to be calculated and paid to HMRC within 30 days of the sale.
For the vast majority of sales, no Capital Gains Tax (CGT) will be due – because of Private Residence Relief which applies to the sale of family homes – but for those properties which have been held as investment properties, the new rules will apply.
This is a massive change from the current rules – under which any CGT on gains made in the year ended 5th April 2019 would be due by 31st January 2020. From 5th April 2020, the pressure is on to work out the Capital Gain, send in a ‘Residential Property Return’, PLUS any tax due, within 30 days of the sale. If no tax is due, then the 30 day rule is not relevant.
CGT payments are effectively a payment on account of Capital Gains Tax – and the final amount owed or repayable will be calculated within the normal Self-Assessment Tax Return.
So, it may well be the case that CGT is payable on selling a property within 30 days – under the new rules – but that a loss on (for example) the sale of shares leads to the Capital Gains Tax paid being refunded once the year’s Self-Assessment Tax Return has been submitted.
It is vitally important that anyone likely to be affected by the new rules contact their accountant before any sale is made – to give time for the tax due to be calculated and the Return to be made. There will be late filing penalties when either the Return is made, or the tax is paid, later than 30 days.