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Capital Gains Tax on UK Properties

Capital Gains Changes - LHP

The deadlines for paying capital gains tax after selling a residential property in the UK are changing from 6 April 2020.

From 6 April 2020, if you’re a UK resident and sell a residential property in the UK, you’ll have 30 days to tell HMRC and pay any Capital Gains Tax owed. If you don’t tell HMRC about any capital gains tax within 30 days of completion, you may be sent a penalty as well as having to pay interest on what you owe. Capital Gains is a tax on the profit of what you sell, that’s increased in value.

You may need to make a Capital gains tax report and make a payment when, for example, you sell or otherwise dispose of:

  • a property not used as your main home
  • a holiday home
  • a property you let out for people to live in
  • a property you’ve inherited not used as your main home

But you won’t have to make a report and make a payment when:

  • a legally binding contract for the sale was made before 6 April 2020
  • you meet criteria for Private Residence Relief
  • the sale was made to a spouse or civil partner
  • gains (including any other chargeable residential property gains in the same tax year) are within your tax free allowance (called the Annual Exempt Amount)
  • you sold the property for a loss
  • the property is outside the UK

If you’re a non-UK resident you must continue to report sales or disposals of interests in UK property or land, regardless of whether there is a Capital Gains Tax liability within 30 days of completion of the disposal.

You will no longer be able to defer payment of Capital Gains Tax via your Self Assessment return, and any tax owed must be paid within the 30-day reporting and payment period. This includes disposals of residential properties, non-residential properties and indirect disposals.

From 6 April 2020 non-UK residents will be able to use the new online service, which will replace the current reporting service.

Further information is at Gov UK

Let’s Talk

For help with capital gains tax advice, please don’t hesitate to contact our team of tax specialists at LHP.

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