HMRC take lighter approach to new Capital Gains Tax reporting rules

Weekly round-up: Covid-19 Financial Support in week 4
April 17, 2020
£1.25 billion support package launched for innovative businesses
April 20, 2020

By Emma Robinson

Emma Robinson
Image to show property investment
20 Apr 2020

HMRC take lighter approach to new Capital Gains Tax reporting rules

 

HMRC released a fact sheet last week on the new Capital Gains Tax (“CGT”) rules for disposals of UK residential property, which implies that they will take a flexible approach towards late filing during the first three months.

This means that for transactions taking place between now and 30 June 2020, they may potentially be reported by 31 July 2020 without late filing penalties applying.  Late payment interest will still apply.

As reminder, from 6 April 2020 where an interest in UK residential property is disposed of in the 2020/21 tax year and beyond (this includes sales, gifts and transfers) by a UK resident, which results in a chargeable gain, this must now be reported to HMRC and the CGT paid within 30 days of completion.

The gain must be reported to HMRC using their new digital service, not the real time reporting service that was previously available.

This also applies to people who were currently in self-assessment, they must now report the gain within 30 days of completion and on their tax return in the year of disposal.

Non-UK residents also fall within the new rules, however they must report all direct and indirect disposals of UK property, including non-residential, and irrespective of whether there is CGT to pay.

Non-UK residents who are also in self-assessment are now no longer able to defer payment of CGT until the filing of their UK tax return.  The new digital service replaces the Non Resident Capital Gains Tax Return.

For more detailed guidance on the new rules, help with calculating your CGT position or filing using the new digital service, please contact us.

 

Emma Robinson works within our private client tax team and has a background of providing bespoke tax advice for high net worth individuals and internationally mobile clients. With experience in complex tax returns, inheritance tax and trusts, she helps to ensure that we provide an all round service to clients – you can contact Emma or the team on 01242 776000 or email tax@randall-payne.co.uk.

Comments are closed.