New CGT Reporting Process
According to the property website Zoopla the number of homes sold in the UK is expected to fall by 60% in the next three months. There was a 40% drop in housing enquiries for the week to 22 March, the week before the lockdown, and new sales agreed fell by 15% on the previous week. This trend is expected to worsen considerably in the coming months, particularly in the light of a further extension to the UK’s lockdown.
Not only is viewing properties in person impossible – although some estate agents have switched to virtual viewings – but many people who were thinking about moving are now rethinking their decision, mostly due to money worries, instead concentrating on ‘riding out the storm’.
While fewer sales are going ahead, anyone who does sell a property at this time needs to be aware that, as of 6 April 2020, Capital Gains Tax (CGT) now needs to be reported and paid within 30 days of completion. That said, you may only have to pay CGT if you make a profit when you sell property that’s not your main residence, which typically includes buy-to-let properties, land or inherited property. In most cases, you do not need to pay the tax when you sell your main home.
This new rule has come in under the Finance Act 2019 and states that, 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.
It is likely that you may have to pay interest and a penalty, if you do not report gains on property within the time limit.
If you sold your property before 6 April this year, you can report the gain using the ‘real time’ Capital Gains Tax service or in your next Self Assessment tax return.
If you’ve got any questions or need any help, please call our team on: 01892 513515 or email: info@lewisandco.biz