In the documents released following the Chancellor’s Budget there is some positive news for those who are considering selling a second UK residential property or one which you lived in and then let out.
Since 6 April 2020, where a UK residential property has been sold by a UK resident individual and there is a capital gains tax liability to pay, the disposal and the payment of the capital gains tax liability must be reported to HM Revenue & Customs within 30 days from the date of completion. This is for property disposals with a completion date up to 26 October 2021
With effect from 27 October 2021, the 30-day deadline has been extended to 60 days from the date of completion to report the disposal and pay the capital gains tax liability.
For the disposal of mixed-use properties, the new deadline is applicable to the reporting and paying of the capital gains tax liability for the residential part of the property only.
For non-UK residents who are considering disposal of UK residential property, the 30-day deadline has been extended to 60 days from the date of completion. Non-UK residents who sell UK residential property must report the disposal to HM Revenue & Customs even if they do not have a capital gains tax liability to pay.
A late filing penalty will be levied by HM Revenue & Customs if the 60-day deadline is missed and interest charged on the capital gains tax payment if it is paid late.
The extension is good as it is a more realistic time frame to enable sellers of residential property to gather the information required to enable the capital gains tax calculation and capital gains tax return to be prepared, along with ensuring they have set-up a Capital Gains Tax on UK Property Account.
Author: Anthony Barron, Tax Manager, Plus Accounting
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Published: 1 November 2021