UK Residents with UK Residential Property Disposals – New Capital Gains Tax (CGT) rules from April 2020

From April 2020 all UK residents must report disposals of UK residential properties to HM Revenue and Customs and also make a payment on account for the CGT due, within 30 days of completion.

The changes do not apply where the gain made is not chargeable to CGT such as where the property has been the individuals only/main residence for the entire period of ownership and therefore covered by the principle private residence relief.  The rules also only apply to residential property currently.

The new rules being brought in are therefore going to mainly affect UK residents with second homes or landlords looking to sell their residential property lets.

Within 30 days of completion UK residents must

  • Calculate the gain made on the property (using estimates if necessary)
  • Report the gain to HM Revenue and Customs
  • Make a payment of CGT to HMRC

These new rules along with the changes to lettings relief and reduction of the final period of principle private residence relief all coincide with each other meaning that a disposal of UK residential properties could mean a higher tax bill from April 2020.

If you have questions on the above, please get in touch with a member of our Tax team.