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The Accountants for Growth

New capital gains rules for residential properties

New capital gains rules for residential properties
Whilst COVID-19 is still at the forefront of everybody's minds at present, it is important to note that some recent tax changes have still taken effect from the 2020/21 tax year.

With that said, one of the most important changes to be aware of is in respect to disposals of UK residential property on or after 6 April 2020 by UK-resident taxpayers, specifically that these transactions must be reported to HMRC within 30 days of completion if they generate a tax liability.

What were the old rules?

Prior to 6 April 2020 taxpayers were required to disclose any capital gains tax liabilities on the self-assessment tax return for the relevant tax year, which the filing deadfline was 31st January after the end of the tax year for most taxpayers.

What are the NEW rules?

All UK residents are now, in theory, within the scope of the new requirements. This includes individuals, trustees, personal representatives, partners of partnerships and limited liability partnerships, and joint owners of property. Non-UK residents have already been required to adhere to this ruling since 6 April 2019.

The tax due must also be paid within this timeframe.

The new rules apply only to disposals of UK residential property made on or after 6 April 2020. Contracts made before 6 April 2020 are not subject to the new regime, even if they complete after that date. Any resulting gains should be reported in the 2019-20 self-assessment return in the usual way.

What should you do?

Whether or not you have sold a property in this tax year or not, the recommendation is to set up a Capital Gains Tax on UK propertly account. You can do this by clicking on 'start' in the link below:

Other information

Please note this content only provides the key facts associated with capital gains tax and residential properties. For further guidance please refer to the following HMRC guidance:

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