Thirty days is not very long for a taxpayer to realise they need to make a report to HMRC and to pay the tax due, but this is the deadline imposed on non-residents who dispose of any UK land or property on or after 6 April 2019. Sellers (excluding companies) who completed their purchase on Saturday 6 April 2019 will have to make an “on account” payment of CGT by Sunday 5 May 2019.
A 30-day reporting deadline has applied in respect of disposals of UK residential property by non-residents since 6 April 2015, but the tax payment date has been inconsistent. Those already within self-assessment could pay the non-resident CGT (NRCGT) due with their SA tax by the normal payment date of 31 January following the tax year end, but others had to pay the tax within 30 days of the conveyance.
This lack of clarity over NRCGT procedures led to HMRC giving incorrect advice to some taxpayers.
The NRCGT charge was announced in the 2013 Autumn Statement, and non-resident taxpayers: Mr and Mrs Kirsopp rang HMRC in March 2014 to ask when they needed to report and pay the tax on the sale of the former UK home. HMRC said they should declare the disposal on their SA tax return. The Kirsopps sold their UK property in July 2015 and they sent their accountant the details in August 2016 along with other papers to complete their 2015/16 return.
HMRC did not inform the Kirsopps they had to submit a NRCGT return by 23 August 2015, either in the original telephone call, or at any later point when they were dealing with HMRC’s non-resident landlord unit. However, HMRC were quick to issue penalties for late submission of the NRCGT form. The tax tribunal threw out those penalties on the basis that the taxpayers had a reasonable excuse for not knowing they had to submit a NRCGT form in addition to the SA return.
The Kirsopps case may prove useful in the future if you fail to pay the CGT due within 30 days, as the article in Agent Update about the extension of NRCGT to all UK property fails to mention the requirement to pay tax within 30 days of the conveyance of the property.
Written by the Tax Advice Network