From this date onwards any taxable gains on the sale of residential property will have to be the subject of a standalone online tax return and payment of the tax within 30 days of completion of the sale. 

Failure to do this will mean penalties and interest from HMRC.  This is the case even when no money has changed hands, whether it is gifted or transferred into a trust.

The new filing and payment timeframe is a seismic change from the current position in which taxpayers have until the self assessment tax deadline of 31 January after the tax year in which the disposal is made to complete a tax return and pay the CGT.  The current system means that, depending on timing of the sale, CGT is due anything from 10 months to 22 months after the sale or disposal.

The new regime means that property owners need to have their records up to date as calculating the CGT due to HMRC will require the property owner to make a reasonable estimate of the tax payable; this is because the rate of CGT will depend on the taxpayer’s income in the whole tax year.

The new rule will therefore particularly effect those selling second homes or buy to let properties with chargeable gains.  Homeowners who have lived in their house for their entire period of ownership will normally be covered by private residence relief and so CGT will not be payable.

For more information on selling or purchasing residential property please contact Gabriella Knowles on 0161 819 4916 or at GK@nexussolicitors.co.uk.