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Capital Gains 30-day Completion Payment Rule Reminder

Capital Gains 30-day Completion Payment Rule

A reminder of HMRC’s 30-day completion payment rule on capital gains tax, introduced back in April 2020, affecting UK residents and trustees disposing of UK residential properties.

This ‘UK land return’, must be filed plus an estimated capital gains tax amount paid to HMRC within 30 days of completion. Where properties that are made up of residential and commercial parts are disposed of, this rule only applies to the residential element.

The rule doesn’t apply to disposals where the individual has lived at a property without a significant break, since acquiring it. Nor in circumstances where profit on disposal of a property is £12,300 or less. Such as a property bought and sold in quick succession.

Self-Assessment / Landlords

Self Assessment clients are not exempt from these requirements. To enable efficient processing of land return and to meet the 30 day deadline, it helps to have the ‘occupation history’ of a property to hand. This allows HMRC to calculate quickly whether 100% PPR (Principal Private Residence Relief) applies or not.

UK Landlords without gains to report, or if the gain is covered by exemptions or losses, won’t have to complete a property disposal return.

If there is a taxable gain to report, the taxpayer needs to calculate capital gains tax due, taking into account annual exemption for the year and guessing correct rate of capital gains tax to apply (18% or 28% based on 2020/21 rates).

After tax year-end, and after completing a self assessment tax return including the property gains; the full income and gains and losses for the year can be calculated. The true amount of capital gains tax is then ascertained and any ‘on account’ payment deducted. This can result in a repayment of capital gains tax for the taxpayer.

Let’s Talk

If you need help with any of this, LHP can prepare capital gains tax returns on your behalf, for a fixed fee. For further information, or an informal chat about how we can help, feel free to contact our team on info@lhp.co.uk or ring 01267 237534.

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