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30-day reporting of CGT on disposals of UK residential property

7 April 2020: ICAEW’s Tax Faculty highlights HMRC’s new service for reporting and payment of capital gains tax (CGT) on disposals of UK residential property.

Few property transactions are proceeding at the moment but anyone selling UK residential property needs to be aware that CGT due now needs to be reported and paid within 30 days of completion.

The new obligation applies to UK residential property transactions where:

· the date of disposal (usually the date of exchange) is on or after 6 April 2020 and

· CGT is due. UK residents do not need to report transactions where no tax is due because of the availability of reliefs (eg, private residence relief, annual exempt amount). Non-UK residents continue to need to report transactions even if no tax is due.

The new service for taxpayers to report their own gain is available on Report and pay Capital Gains Tax on UK property.

The new service for agents to report on behalf of their clients is available on Manage your client’s Capital Gains Tax on UK property account.

The report and payment are both due 30 days from the date of completion.

Example

Contracts exchanged 6 April, contract completed 17 April, report and payment due 17 May.

Where an agent is acting for the client, the client has to set up an online CGT account and to authorise the agent online, even if authority for other services is in place. The Tax Faculty has made representations about the problems this will cause, but so far to no avail.

The services are still in public beta and the Faculty understands that some of the functionality is not fully developed - clarification has been sought. The service cannot be used for someone who has died (contact HMRC in this situation) or by non-residents who need to report disposals of mixed-use properties or indirect disposals of UK property (use the existing service for non-residents for these types of transaction).

ICAEW has made representations that the introduction of this service should be delayed in the light of the COVID-19 crisis, the lack of awareness of the new requirements and the issues with agent access to the system. However, the service and the legislation, including the penalty regime, are in place and the government has not yet announced any delay or soft landing.