Tag: CGT

HMRC extends late reporting deadline for CGT

HMRC has confirmed it will not charge penalties for the late reporting of capital gains tax (CGT) on disposals of UK residential property by UK residents made by 31 July 2020.

On 6 April changes were made so that if a UK resident sells a residential property in the UK, they now have 30 days to tell HMRC and pay any money owed.

The seller must submit a standalone tax return covering the CGT, which can no longer be included as part of a self assessment return.

Failure to tell HMRC about any CGT within 30 days of completion may incur a penalty, as well as interest on the sum owed.

HMRC stated:

‘To help those selling properties familiarise themselves with the change in the rules and a new online process, HMRC is allowing a period of time to adjust and will not issue late filing penalties for CGT payment on account returns received late up to and including 31 July 2020.

‘For UK residents, this means transactions completed between 6 April and 30 June 2020 and reported up to 31 July 2020. Transactions completed from 1 July 2020 onwards will receive a late filing penalty if they are not reported within 30 calendar days.

‘Interest will accrue if the tax remains unpaid after 30 days.’

Get ready for 30-day returns and payments for residential property gains

Legislation has been enacted to change reporting obligations for residential property gains chargeable on UK resident individuals, trustees and personal representatives. Also introduced is a requirement to make a payment on account of the associated capital gains tax (CGT) liability. For disposals made on or after 6 April 2020:

  • a standalone tax return is required if there is a disposal of UK land on which a residential property gain accrues
  • CGT is required to be computed on the reported gain in the tax return
  • the return needs to be filed and the CGT paid within 30 days of the completion date of the property disposal.

The new requirements do not apply if a chargeable gain does not arise, for example where the gains are covered by Private Residence Relief.

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