UK resident taxpayers now need to report and pay CGT due on the disposal of residential property within 30 days of the completion date. This has prompted a director of HMRC to say that 2019/20 will be the last year that taxpayers have to pay CGT on the sale of properties with their SA tax returns. This is not correct.
Taxpayers are still required to report and pay CGT in respect of disposals (not just sales) of all types of property and other assets as part of their SA return. The gains arising from residential property must be reported twice for the same tax year:
- On the taxpayer’s UK property account alongside an “on account” payment of CGT
- On the SA return, with a payment of any further CGT due, or reclaim any overpaid CGT.
For disposals made on and after 6 April 2020 non-resident individuals and trustees must report the gains or losses from all types of UK property on their UK Property Account, within 30 days of the date of completion of the deal. This applies to UK property held directly or indirectly.
The taxpayer’s UK property account can now be amended for details of earlier disposals. Where the disposal by a non-resident was made before 6 April 2020 using the previous structured email form, that calculation can also now be resubmitted showing the final figures.
Disposals of property are not necessarily sales. Many families pass down property to the next generation as gifts, but these disposals must also be reported as the property is treated as being transferred at market value between connected parties. CGT will arise on any resulting gain.
Hold-over relief, which effectively postpones the gain until the asset is disposed of by the recipient, is only available on business assets, agricultural land, or where the gift is subject to IHT. If such a hold-over relief claim is made HMRC will now accept digital signatures on that claim form.
Written by the Tax Advice Network