Important Capitals Gains Tax Changes on Property Transactions

Capital Gains Tax is a tax charged on profit from the sale of a property or investment.   It applies to certain chargeable assets, including property that is not your main home, or is your main home that you’ve let out or used for business.

Under previous rules, Capital Gains Tax was to be paid anywhere between 10 and 22 months after the date of sale for personal taxpayers.  The Finance Act 2019 has however introduced new legislation that now brings about changes in Capital Gains Tax on private residences, including significantly reducing this time period. 

These changes come in two parts, the first of which relates to direct/indirect disposals of land which meet the non-residence condition.

From the 6th April 2019, Capital Gains Tax now applies to disposals of any UK land and property by individuals who are non-resident in the UK.  Prior to this date, the charge generally only applied if you were resident in the UK.  Following the implementation of this, you must tell HM Revenue & Customs within 30 days of completion of the sale/disposal.  This applies even if there is no tax to pay.

Secondly, the legislation reduces the timescale in which the liability for Capital Gains Tax is to be paid on any other direct disposal of UK land in which a gain (i.e. profit) is made.  The return must be submitted within 30 days of the completion date and will be applicable to disposals made on or after the 6th April 2020.  This is therefore an extremely important change that will come into force within the next year and will especially be pertinent for those with buy to let properties.

In the event the new timescales for Capital Gains Tax are not met, monetary penalties will apply.  It is therefore important to be aware/prepared for the upcoming changes.   

If you do have any questions concerning liability for Capital Gains Tax, we would recommend that you seek advice from a specialist Tax Advisor or accountant. This information is provided from a conveyancing perspective by BTMK Marcus Baum.

You can contact BTMK Marcus Baum at [email protected] or by telephone on 01702 346677.

Emily Gowers, the author of this article, and a residential property specialist in our team at BTMK Marcus Baum can be contacted at [email protected] or by telephone on 01702 346677.

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