Capital Gains Tax - 60 day reporting

Property disposals are now subject of significant changes to the administration and payment dates of UK capital gains tax.

Property disposals are now subject of significant changes to the administration and payment dates of UK capital gains tax.

A UK resident who disposes of UK land needs to submit a CGT return to HMRC within 60 days of its competition.

Previously, a disposal was included in their annual self assessment tax return and liability was payable by 31st January following the end of the tax year.

Associate partner Sinéad Catchpole said, since the rule came into force in April, the practice had dealt with a number of such returns.

“It is not something that is automatically picked up as part of the conveyancing process and it appears, certainly in some cases, solicitors are not making clients aware of the change,” she said.

Each relevant property disposal requires its own 'payment on account' return in addition to the person's regular annual self assessment tax return, resulting in the potential for multiple filing deadlines throughout the year.

To file the payment on account return, a potentially complex CGT calculation needs to be prepared within 60 days, which means full, up-to-date records need to be available at that time.

 A reasonable estimate of the person's expected income for the year is also needed to apply the correct CGT rate to the calculation, along with details of their available unused annual exemption and any unused capital losses. 

Chartered accountant Roger Whitehouse said: “Sorting the CGT return can be drawn out and if clients require any advice or support they should not hesitate to give their usual contact at RNS a call.”

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