Capital Gains Tax: 30 Day Report & Pay Policy

From 6 April 2020 HMRC introduced a new ‘report and pay’ policy regarding Capital Gains Tax on the sale of residential property. Under this policy, Capital Gains Tax must be reported and paid to HMRC within 30 days of sale completion. 

When do I need to report and pay Capital Gains Tax (CGT) within 30 Days?

You may need to report and pay CGT when, for example, you sell or otherwise dispose of:

• a property that you have not used as your main home;
• a holiday or second home;
• a rental property; or
• a property that you have inherited and have not used as your main home.

However, you won’t have to report and make a payment when:

• a legally binding contract for the sale was made before 6 April 2020;
• you meet the criteria for full Principal Private Residence (PPR) Relief;
• the sale of disposal was made to a spouse or civil partner;
• the gains (including any other chargeable residential property gains in the same tax year) are within your tax free allowance (called the Annual Exempt Allowance and currently £12,300 for 2020/21);
• you sold the property for a loss; or
• the property is outside the UK.

How do I report?

HMRC has launched a new online system to report and pay Capital Gains Tax. As agents, Gildernew & Co. have online access to report disposals of residential property and can ensure that any CGT is paid withing 30 days on behalf of our clients. 

Capital Gains Tax should also be disclosed on your Self-Assessment tax return. 

Failure to report

Due to COVID-19, late filing penalties will not apply on disposals of UK residential property completed on or after 6 April 2019 and before 1 July 2020 and reported up to 31 July 2020.

Any disposals completed from 6 April 2020 with Capital Gains Tax remaining unpaid after 30 days will suffer an interest charge.

Any disposals completed after 1 July 2020 with Capital Gains Tax not reported by 31 July 2020 will receive a late filing penalty.

In order to avoid any penalties or interest charges, it is important you notify us as soon as you complete any disposal of properties so that an accurate calculation of your gain is completed, and applicable notice given to HMRC.

Should you wish to discuss this new policy further or indeed any tax queries, please contact Orla Mallon, Senior Accountant/Chartered Tax Advisor on 02887724697 or orla.mallon@gildernewandco.com

Find out more about our team of experts and the services provided by Gildernew & Co. by clicking here.

Gildernew & Co. Ltd make every effort to ensure the accuracy of the information herein.   However, no reliance should be placed on any of the above without seeking independent professional accountancy, legal and/or financial advice.