Press release: Time limits tightened for CGT on UK residential property

The Association of Taxation Technicians (ATT) is warning owners of UK residential property1 that if capital gains tax (CGT) is due on a sale or gift of a property after 6 April 2020 they will only have 30 days from completion of the disposal to report to HMRC and pay the tax.

The ATT is calling for sufficient publicity of the new measure and a soft landing for penalties in the first year as owners familiarise themselves with their new obligations.

Jon Stride, Co-Chair of the ATT’s Technical Steering Group, said:

“Similar rules already apply to individuals who are not resident in the UK and dispose of UK residential property. From 6 April 2020, UK residents will also be subject to the same strict short reporting window. The significance of this change should not be underestimated. Thirty days after completion is a very short timescale in which individuals must calculate, report and make the payment on account of CGT. CGT computations can be complex and it can take time to establish all the necessary facts to make an accurate computation of the taxable gain. Sellers will need to start gathering information and details of historic costs, or dates of occupation well in advance of the sale.”

The ATT raised a number of concerns on the text of the draft Bill, earlier this year.

Jon Stride continued:

“We are pleased to see the latest Bill has been amended to take account of ATT’s concerns. We had asked for more flexibility to allow for individuals to make estimates of figures in order to be able to report within the shorter time scale, provision for the amendment of those estimates and much more clarity over how the new return interacts with the existing self-assessment system. These concerns have been addressed in the new Bill, but there are still some quirks and we will be making further representations in the next few days.

“Our primary concern now is ensuring that there is sufficient publicity of the new measure so that those disposing of residential property are aware of the new time limits and can plan accordingly.

“We would also like to see a soft landing for penalties in the first year as owners familiarise themselves with their new obligations. The introduction of additional reporting requirements over and above the existing self-assessment system caused a lot of problems for non-resident in the UK people, with many not being aware of the changes and challenging late filing penalties in the courts. It is vital that everyone engaged in the conveyancing of UK residential property is aware of the forthcoming changes for UK residents so that the same problems do not occur when the regime is extended.”

Notes for editors

  1. The measure will apply to individuals, trustees and personal representatives sale or gifting of UK residential property. The measure will apply to both sales and gifts of property.
  2. Non-resident in the UK individuals currently have to complete a non-resident Capital Gains Tax return to report disposals of UK residential property. The intention is to align the treatment for non-residents and UK residents and the rules that will apply to UK residents from 6 April 2020 will apply to non-residents from 6 April 2019. The major remaining difference is that non-residents must report all disposals of UK residential property, regardless of whether or not there is any CGT to pay.
  3. The ATT’s original submission on the draft Bill published in July 2018 can be found here, and the current version of Finance (No.3) Bill 2017-19 can be found here. The new provisions for returns for disposals of UK land can be found in Schedule 2.
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