Looming on the horizon are some most unwelcome changes in the way that UK taxpayers will have to report and pay for capital gains tax (CGT) on residential properties in the future. (These changes will not apply to UK resident companies and these rules already exist under a similar regime for non-residents).
At present, a capital gain made by a UK resident individual is reported through the self-assessment tax return regime. This means that, if an individual disposes of a property anywhere, say, between April 6, 2018 and April 5, 2019 it will be notified on his or her 2018-19 tax return ' which does not need submitting until January 31, 2020 (and the tax is due on the same day). The current system means that it can be anywhere between 10 and almost 22 months before the CGT is returned and settled. (This regime works in a similar way for trusts and partnerships).
The government's intention is that within 30 days of the residential property's disposal, the beneficial owners (who are UK residents) must prepare a provisional CGT return and make a provisional payment on account of the CGT ultimately to be due. This will be in addition to the existing CGT aspects of self-assessment. In other words, taxpayers will still have to fill in the CGT pages of their self-assessment tax returns and pay any outstanding CGT by January 31 after the tax year in question.
About the Author: Glen Callow
