In a welcome move for residential property owners, the Budget Red Book confirmed that the current 30-day capital gains tax (CGT) payment window will be extended to 60 days
From 27 October 2021 the deadline for residents to report and pay CGT after selling UK residential property will increase from 30 days after the completion date to 60 days.
For non-UK residents disposing of property in the UK, this deadline will also increase from 30 days to 60 days.
This will ensure that taxpayers have sufficient time to report and pay CGT, as recommended by the Office of Tax Simplification.
When mixed-use property is disposed of by UK residents, legislation will also clarify that the 60-day payment window will only apply to the residential element of the property gain.
Tim Walford-Fitzgerald, private client partner at accountancy firm HW Fisher said: ‘In the small print announced in the Budget, for those selling UK residential property the deadline to file a tax return will be extended from 30 days to 60 days from midnight tonight.
‘This is welcome news and it is positive to see that the Chancellor has recognised the reality of these transactions. To anyone selling a property and up against tight deadlines to receive registrations you can breathe easy.’
Chancellor Rishi Sunak has asked the Office of Tax Simplification (OTS) to carry out a thorough review of capital gains tax (CGT).
In a letter to the OTS, the Chancellor requested that the independent office review CGT and aspects of the taxation of chargeable gains in regard to individuals and small businesses.
Mr Sunak requested that the review identifies and offers advice on the opportunities to simplify the taxation of chargeable gains to ‘ensure the system is fit for purpose’.
In the letter, the Chancellor said that he would be interested in proposals from the OTS on the regime of allowances, exemptions, reliefs and the treatment of losses within CGT, in addition to the interaction of how gains are taxed compared to other types of income.
The OTS has published a call for evidence in the form of an online survey, which seeks views on CGT. The OTS wants to hear from businesses, individuals, professional advisers and representative bodies about which aspects of CGT are complex and difficult to get right, as well as suggestions on how the tax can be improved.
HMRC has confirmed it will not charge penalties for the late reporting of capital gains tax (CGT) on disposals of UK residential property by UK residents made by 31 July 2020.
On 6 April changes were made so that if a UK resident sells a residential property in the UK, they now have 30 days to tell HMRC and pay any money owed.
The seller must submit a standalone tax return covering the CGT, which can no longer be included as part of a self assessment return.
Failure to tell HMRC about any CGT within 30 days of completion may incur a penalty, as well as interest on the sum owed.
‘To help those selling properties familiarise themselves with the change in the rules and a new online process, HMRC is allowing a period of time to adjust and will not issue late filing penalties for CGT payment on account returns received late up to and including 31 July 2020.
‘For UK residents, this means transactions completed between 6 April and 30 June 2020 and reported up to 31 July 2020. Transactions completed from 1 July 2020 onwards will receive a late filing penalty if they are not reported within 30 calendar days.
‘Interest will accrue if the tax remains unpaid after 30 days.’
Internet link: HMRC guidance