Capital Gains Tax changes from April 2020

For UK tax-resident landlords with residential property, there are big changes arriving on 6 April 2020 for capital gains tax reporting and payments.

Gains on such disposals must be declared on a new online property disposal return (and a payment made on account, of the tax due) within 30 days of completion.

If you are already in self-assessment you must then include the gain on your self-assessment return.  Any adjustments to the figures or reliefs claimed can be made here and the tax due will be adjusted accordingly.

If you are not already in self-assessment you can register and include the gain on your self-assessment return but you are not required to if you do not have any other income or gains which mean you need to register.

It will be possible to amend the online return after the 30 day window within the normal self-assessment amendment window.

If no CGT is due the new online return does not need to be filed.  Note however that if you expect to have future disposals (of property or otherwise) in the relevant tax year that would give rise to a capital loss, you cannot take these into account for calculation purposes at the time of the disposal giving rise to the first gain.

Failing to meet the 30 day deadline will result in penalties:

  • Up to 30 days late = 5% of the tax due
  • 6 months late = 5% of the tax outstanding at that date
  • 12 months late = 5% of the tax outstanding at that date

This change is on top of restrictions to reliefs that can currently be claimed if the property concerned was at some point in time the taxpayer’s principal residence.

Please contact us if you need any help or advice in this area.  If you are currently planning a disposal it may be in your interests to ensure it completes before 6 April, particularly if it was previously your main residence.