Wylie & Bisset warns of 30-day deadline for UK residential property disposals by UK residents

Chartered accountants Wylie & Bisset has warned UK residents planning to sell a UK residential property that changes coming into effect from 6 April 2020 will see a seismic shift in the deadline for reporting taxable gains thereon and settling any tax (CGT) due.

Wylie & Bisset warns of 30-day deadline for UK residential property disposals by UK residents

Catherine McManus, Wylie & Bisset tax partner

Many UK taxpayers will be aware that, under current rules, if they sell or gift a taxable interest in UK residential property, any gain is reportable to HMRC, usually via self-assessment, by 31 January following on from the tax year of disposal, with tax payable at the same time.

However, Catherine McManus, Wylie & Bisset tax partner, points out that, as of 6th April 2020, UK resident individuals and trusts will be required to notify HMRC within 30 days of completion of both their sale transaction and estimate of tax due, with tax payable by this advanced deadline.

This will be done via completion of a ‘UK Land Return’. Payments made will be treated as a payment on account towards the final liability which will still require to be entered on Self-Assessment tax returns alongside the Payment on Account previously made.

Ms McManus said: “It is vital that UK taxpayers gather the information required to calculate tax due and liaise with professional advisers accordingly to make sure they meet their 30-day obligation going forward. Failure to do so could result in late filing penalties for non-compliance and interest charges for late payment.”

There are exceptions to the application of the new rules, most notably where the gain in question is covered by a tax relief such as private residence relief (PRR) and/or letting relief.

However, with PRR and letting relief both also subject to significant changes as of 6 April 2020, McManus suggests that there are likely to be many more properties subject to a CGT charge than ever before.

She added: “These rules are an extension of those introduced for non-UK resident taxpayers in 2015, which were themselves widened in 2019. We can assist with the filing obligations of these changes and advise on the tax arising. We can also consider planning, where relevant, to minimise the scope and impact of these new rules.”

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