30 Day Capital Gains Tax reporting?

There have been new reporting requirements introduced to UK residents by the government for those who are disposing of residential property on or after 6 April.

You will now need to report the disposal of residential property in the UK within 30 days where capital gains tax applied, the payment of the liability would also be due in 30 days. If you also submit a self assessment you would need to report the disposal, any property that is disposed of outside the UK isn’t affected by these rules.

Who do the new rules affect?

The people that are UK tax paying citizens that are required to abide by the 30 day CGT are listed below:

-          Individuals

-          Personal representatives

-          Trustees

-          Joint owners of property

-          Partners in partnerships and limited liability partnerships

Which disposals are included in the 30 day CGT rule?

The 30 day CGT rules apply to disposals of residential properties in the UK where the date of disposal (the date that the contracts are exchanged) is on or after the 6 April 2020 and there’s a CGT liability. The rule is applied to direct interests in a residential property such as gifting or selling a property, the rule isn’t applied to indirect interests such as shares in a company which holds UK residential property.

Examples of where the 30 day rule applies

-          Rental properties

-          A property that you have never lived in or only lived in for a part of the ownership

-          Holiday homes

Examples of where the 30 day rule doesn’t apply

-          Where the property is sold at a loss

-          Where there is neither gain or loss such as transferring between spouses or civil partners

-          If the gain via disposal is fully covered by exemptions

-          The disposal of a pension scheme investment

-          Disposal of property which is chargeable to income tax

-          Disposal of a charity

If you are selling your main or only residence you shouldn’t be caught by the 30 day rule as long as the property has been occupied by yourself throughout the period of ownership.

How is the disposal reported to HMRC?

There is a digital service made by HMRC where all reports can be made and submitted, to make this report the trustees and individuals will need to make a government gateway account with HMRC, they can choose whether they would want to report the disposal themselves or have a tax agent do it on their behalf. When the 30 day return is submitted to HMRC, they will issue a reference for payments and information of where to pay this too.

For more information get in touch with Cheylesmore Chartered Accountants where we can help you with your Capital Gains Tax and avoid any confusion or late penalties.