Contact Us

Buy-to-let landlords and owners of multiple residential properties will soon have a shorter time frame in which to pay capital gains tax owed from property sales.

The Association of Taxation Technicians (ATT) has warned that HM Revenue & Customs (HMRC) is set to bring in new rules from April 2020. Landlords and trustees selling a residential property will be required to make a payment on account of the capital gains tax derived from any sale within just 30 days of the sale’s completion.

Currently, if capital gains tax is owed by an individual or trustee, a disposal must be reported to HMRC in the relevant self-assessment tax return.

Within the self-assessment, any capital gains tax owed during a tax year must be paid in full by 31st January following the tax year of disposal.

For example, if a buy-to-let landlord completed the sale of a property on 1st October 2018, the existing rules mean that any capital gains tax derived from this sale would be due on 31st January 2020.

The new proposed rules would require the same seller to pay their outstanding capital gains tax in full by 1st November 2018.

HMRC fears the payment window before any capital gains tax is paid is too long at present. Nevertheless, whether a 30-day window is feasible for sellers to calculate the amount of capital gains tax due, inform HMRC and pay it in full remains to be seen.

Jon Stride, Co-chair, ATT’s technical steering group, said: “The new rules will significantly reduce the amount of time that those selling residential property will have to calculate and pay their CGT bill.

“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 date of occupation well in advance of the sale.”

The ATT adds that ‘in year’ reporting may prove particularly confusing to some individuals who won’t be aware of the applicable rate of tax at the time of each disposal.

The applicable rate of tax for any capital gains tax is linked to the seller’s overall income for the same tax year, with only a ballpark figure possible if the disposal is made midway through the tax year.

Those selling their only property or primary home are not likely to be affected by the new capital gains tax proposals due to full private residence relief.

If you are considering selling a personal asset or all or part of your business, your local TaxAssist Accountant can advise you of the tax planning opportunities before making your disposal to HMRC. This can mitigate or reduce potential tax liabilities.

For a free initial capital gains tax consultation with your nearest TaxAssist Accountant, call us today on 0800 0523 555 or drop us a line using our online enquiry form.

Date published 13 Jun 2018 | Last updated 13 Jun 2018

Choose the right accounting firm for you

Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?

Local business focus icon

Local business focus

We specialise in supporting independent businesses and work with 80,684 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.

Come and meet us icon

Come and meet us

We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 409 locations, meet with us online through video call software, or talk to us by telephone.

Switching is simple icon

Switching is simple

Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.

See how TaxAssist Accountants can help you with a free, no obligation consultation

0800 0523 555

Or contact us