CGT payment deadline changes!

CGT payment deadline changes!

13:54 PM, 7th February 2020, About 2 years ago 8

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New tax deadline for property sales. I read this this morning (I think I may have heard about it before, but this time it registered):

6 April 2020 will see a change in the deadline for UK residents who sell a residential property as to when Capital Gains Tax (CGT) on the sale is due. Currently, the due date for paying any CGT owed to HMRC is the 31 January following the end of the tax year in which a capital gain was made. This deadline gave taxpayers between 10 and 22 months to settle their CGT bill.

The deadline will change for UK residents from 6 April 2020. This change will mean that any CGT due on the sale of a residential property will need to be reported and a payment on account of any CGT due (an advance payment towards their tax bill) made within 30 days of the completion of the transaction.

This means that there will be a significant difference in your CGT payment date if you sell a residential property before the end of the current tax year compared to making a sale in the new tax year. The payment date for any CGT due on residential property sales made before 6 April 2020 will be 31 January 2021. Any CGT due for residential property sales on or after 6 April 2020 will be due within 30 days of completion.

For non-UK residents, these CGT changes came into effect from 6 April 2019.

In practice, this change will apply to the sale of any residential property that doesn’t qualify for Private Residence Relief (PRR). The PRR relief applies to qualifying residential properly used wholly as a main family residence. The new deadline will mainly apply if you are disposing of a second / holiday home, an investment rental property or a home that does not qualify or only partially qualifies for PRR.



Mike T

14:29 PM, 10th February 2020, About 2 years ago

Yes, I made the mistake (unknowingly at the time) of notifying the taxman of the sale of a property when submitting my end of year return. This resulted in a £100 fine. Lesson learned - keep up to date with all things. Read Property 118 DAILY and stay in touch cos 'They' are out to get you 'one way or another' 😉 .

roman lipka

17:22 PM, 10th February 2020, About 2 years ago

If the property qualifies for PPR does it then mean you have until the 31st of January to pay your cgt?

David Lawrenson

8:55 AM, 11th February 2020, About 2 years ago

Yes, it is just one more tax attack on landlords.

Here is a summary of the different ways that the government has massively ramped up taxes on private landlords in recent years.

1 Removal of the wear and tear allowance. Previously landlords letting furnished property could deduct 10 per cent from net rents each year.

2. The removal of a landlord’s ability to deduct loan and other financing costs directly from rents, before declaring their profits. Phased in over four years starting in 2017/18. From the tax year 2020/21 it will be fully phased in. Has already pushed landlords who were previously comfortable basic rate taxpayers into the higher rates of tax. Instead of the tax break, landlords will get an effective “tax credit” equal to 20 per cent (the current basic rate of tax) of their finance costs added back in, after their tax has been calculated.

3. A special high rate of capital gains tax. Every individual in the UK who has a capital gain from anything other than buy to let will generally pay tax at 10 per cent (if a basic rate taxpayer) or at 20 per cent (if a higher rate taxpayer). Not non-incorporated buy to let landlords who are singled out as the only group in the UK who have to pay 18 per cent (basic rate taxpayers) or 28 per cent (for higher rate taxpayers) – a full 10 per cent more than everyone else on each eligible pound of gain.

4. Taper Relief and Indexation Relief have long gone. Both meant there was some allowance for the effects of inflation, but their removal means gains which simply reflect the general prevailing rate of inflation are taxed in full, with no allowance for the inflation.

5. A 3 per cent levy to be paid on the purchase price of each property a landlord buys to let. (This is in addition to huge increases in the normal residential SDLT rates in recent years, which has meant property is now taxed far more heavily than say, share purchases).

6. Abolition of Lettings Relief, which was worth up to £40,000 – and which could be used to cover any period that a property was your main residence at any time, plus, for each property, the last 3 years of ownership. Only still available in some lodger situations.

I feel that more maybe still to come as I'm convinced that the government would rather big pension funds and large property companies were the only ones involved in the PRS. ...

We will have to see.

David Lawrenson
Private Rented Sector Advice

Steve Hards

12:05 PM, 15th February 2020, About 2 years ago

Reply to the comment left by David Lawrenson at 11/02/2020 - 08:55
That's a fantastic summary, David! And very timely as I was looking for one to use when writing to my new MP.

David Lawrenson

13:38 PM, 15th February 2020, About 2 years ago

Thanks Steve.
(Ps I'm one of a very few voices who think these tax changes are actually more about handing control of letting property from individuals to big corporates like Grainger, L:&G, Macqaurie Bank etc. than about helping first time buyers).


15:43 PM, 15th February 2020, About 2 years ago

Is there anyone in 118 who can help me work out the cgt I will need to pay. I am willing to pay.


11:37 AM, 19th February 2020, About 2 years ago

As a landlord you will hopefully be filing tax returns anyway. Assuming the new system will work as it currently does for non residents, as long as you file a cgt return within 30 days of a sale declaring you will provide full details on your self assessment return you would be able to defer the tax payment to 31 Jan.

Mike T

19:21 PM, 21st February 2020, About 2 years ago

Reply to the comment left by Dissalusioned at 15/02/2020 - 15:43
I think you will find, on the Gov/self assessment/tax return website, that they have a calculator to do the job for you. Just fill in the details asked for and the calculation is made . Also, I think you can go back to it to change/correct/add BEFORE submitting.

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