A new online system for paying and declaring CGT within 30 days of completion for sales of residential property was introduced from 6 April 2020. CGT online applies to all sales of UK homes where exchange and completion occurred after 5 April 2020. Sellers who are not tax-resident in the UK must report all UK property sales within 30 days.
There are two broad exceptions to this 30-day rule:
• the deal is loss-making; or
• the gain is covered by your annual exemption (£12,300 for 2020-21).
Otherwise if the CGT is not reported and paid within 30 days of completion you will receive automatic late-filing penalties from £100 up to £1,300 as the delay lengthens.
HMRC did not apply a penalty for sales completed before 1 July 2020 which were reported by 31 July 2020. However transactions completed on or after 1 July 2020 must be reported within 30 days through your online: ‘CGT on UK property account’.
You need to set up the account using your government gateway ID and passwords. You will then have to authorise your accountant to report transactions through the account.
A conveyancing solicitor is very unlikely to deal with the CGT reporting so you must tell your accountant as soon as you agree to sell a property to give them time to calculate the gain before the 30-day deadline.
This article is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or taking professional advice. The authors and the firm cannot accept any responsibility for loss arising from any person acting or refraining from acting on the basis of the material included herein.