Significant update on UK Capital Gains Tax
Thanks to our friend Peter Vaines of Field Court Tax Chambers for this significant update on UK capital gains tax
On 6th April 2020 the new rules come into force concerning the reporting and payment of capital gains tax on the disposal of UK residential property. Thereafter, a new online return must be filed together with a payment on account of the capital gains tax, within 30 days of completion. (This is all quite separate from the continuing obligations on non residents and the NRCGT returns).
This is going to involve some neat footwork to calculate the capital gains tax on time. There are special rules to deal with losses, and assumptions about the income levels likely in the current year. However, unlike the position with non residents, no new return will be required if there is no tax payable on the disposal.
HMRC have confirmed that these new rules only apply to gains arising on disposals after 5th April 2020. The relevant date for disposal will be the normal rule in Section 28 TCGA 1992 – that is the date of exchange of contracts where the contracts are unconditional or the date when a conditional contract becomes unconditional.
Disposals of UK residential property prior to the end of this tax year are to be disclosed in the 2019/20 self-assessment returns in the normal way.
I suppose we will get used to it – but I can see a whole new series of appeals to the FTT in respect of penalties arising under these new rules.
If you need help in filing UK CGT return after 6 April 2020, then please contact [email protected]