10 May HMRC Proposes Important Changes to Capital Gains Tax
HM Revenue & Customs has proposed a number of important changes to the ways in which it collects Capital Gains Tax (CGT) following the sale of residential properties.
In a document published in April, HMRC has proposed that any CGT payments associated with the sale of a residential property should be made within 30 days of the sale taking place.
The proposed changes, which come in a bid to ‘speed-up’ CGT payments for residential property transactions, would take effect from April 2020, the tax authority has said.
Under the suggested rules, anyone who has sold a residential property liable for CGT would need to submit a ‘payment on account’ return to HMRC at the same time as the CGT payment itself is made.
The changes would only affect those selling a second home or buy-to-let property – and would not apply to any disposals covered by private residence relief, HMRC has said.
However, in these instances, a payment on account and a return would still need to be made if only some of the gain was covered by the relief.
The Revenue has also confirmed that the changes would apply to the sale of any overseas properties sold by UK residents – meaning that a payment on account would need to be calculated by the seller under these circumstances.
However, this would not apply if the gain on the disposal was taxed in the other country and double taxation relief was available, or the gain was taxed on the remittance basis, it has said.
A consultation into the proposed changes can be accessed here.