With effect from 6 April 2020 HMRC has amended the way in which disposals of UK property by individuals is being reported and paid.
Prior to this date, any gains arising on disposal of UK property were reported on an individual’s self-assessment tax return with payment falling due on 31 January following the end of the tax year in which the gain arose. From 6 April 2020 HMRC requires disposals to be reported and any gains arising to be paid within 30 days from the day of the transaction taking place.
As Covid-19 began to disrupt the UK economy, the government issued extensions for transactions that took place between 6 April 2020 and 1 July 2020, stating that these sales could be reported by 31 July with no penalty or late fees, though this does carry interest after 30 days.
It is important to note that any transactions which took place on 2 July or after are now subject to the 30-day deadline and you must report and pay any CGT by 31 July to avoid penalty charges if you made a transaction during the ectension period.
HMRC has published new guidance for agents that are managing property accounts, advising on the new system that allows them to report on behalf of their clients. Read the full guidance here.
Most of these gains can be reported online, though there are two instances where you will need to file paper returns:
- For second or subsequent sales;
- When the estate of a deceased person makes a disposal during administration.
Non-UK residents must continue to report disposals of UK property regardless of whether there is CGT liability arsing within 30 days of completion. The online portal should also be used by non-UK residents.