From 6 April 2020, where CGT is due on the disposal of UK residential property by a UK resident individual or trustees, a new standalone online return will need to be filed, together with payment on account of CGT, within 30 days of the date of completion of the transaction. (Finance Act 2019 Schedule 2)
For the avoidance of any doubt, HMRC have confirmed to us that the new reporting and payment regime applies only to taxable gains accruing on disposals of UK residential property made on or after 6 April 2020 (in the tax year 2020/21). This means that where contracts are exchanged under an unconditional contract in the tax year 2019/20 (6 April 2019 to 5 April 2020) but completion takes place on or after 6 April 2020 the 30 days filing requirement does not apply. The gain should be reported in the 2019/20 self-assessment return in the usual way.
Example
Anna, a UK resident individual, exchanges contracts for the sale of her buy to let property under an unconditional contract on 1 April 2020. Completion takes place on 15 May 2020. The gain accruing on the disposal should be included on Anna’s 2019/20 self – assessment return. The requirement to file a separate online return within 30 days of completion does not apply because the disposal was made in 2019/20 before the new reporting requirements take effect.
If, however, exchange of contracts takes place on or after 6 April 2020, or the contract is conditional and the condition is not satisfied until after 6 April 2020, Anna will be required to make a return to HMRC within 30 days of completion of the transaction together with a payment on account within the same 30 days’ timescale.
The new CGT reporting regime is the subject of a series of two articles in Tax Adviser (in the January 2020 and February 2020 editions).