Capital Gains Tax rules change 6th April 2020
From 6th April 2020 the rules changed for reporting the sale of residential property to HMRC. This only applies to residential property.
Before 6th April 2020 you were able to include the Capital Gains information (i.e. did you make a profit or a loss on the sale of a property) on your annual Self Assessment Tax Return and then pay the tax due if there was any by 31st January in the following year.
What’s new is that for property disposed of from 6th April 2020, a return has to be submitted to HMRC within 30 days and payment of any tax due made as soon as HMRC advises you of the tax reference number to use. You must not make the payment until you receive this and payment method advice from HMRC.
There are some exclusions to this, including:
Entitlement to full tax relief on any of the profit you made
If the legal disposal was before 6th April 2020
If you are simply transferring the property between spouses or civil partners
If you made a loss on the sale OR the gain uses up your annual exempt gains allowance
There are penalties and interest charges if you don’t do this at the right time.
Your solicitor may remind you of the need to do this when you sell, but there are some calculations needing done so that the correct amount of tax is paid. If you think this applies to you contact John Fairgrieve on 0141 556 5348 for expert advice.