Gerry Surtees Chartered Tax Adviser

Important changes to property taxation

If you own a second home or residential rental property, have a home which may not fully qualify for capital gains tax relief when you sell, or you are not resident in the UK but have interests in UK property (residential or commercial) then you could be affected by recent changes to property taxation.

CGT on residential property

With effect from 6th April 2020, anyone selling a residential property on which there is a taxable gain, has 30 days from the date of completion to deliver a return to HMRC and pay the tax - aligning with the Stamp Duty Land Tax return and payment deadline.  Provision is made for reasonable estimates and assumptions given the tight timescale.

This could affect those selling residential properties they have never lived in, or their own homes if not fully covered by the capital gains relief for sale of your own home.  The latter could apply where you have not been in continuous occupation, or your plot size is more than half a hectare.

CGT on UK property owned by non-residents

If you are not resident in the UK for tax purposes but own property in the UK, either residential or commercial, this is now subject to a new UK tax known as ‘non-resident capital gains tax’ if you realise a gain on sale.  Also the same 30 day reporting and payment deadline applies as above and is already in force for non-residents.

The above provides a brief overview of the changes – as always, if you have any questions about your own situation, we suggest you should seek suitably qualified advice.

Please note: This report is provided for information only. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this report can be accepted.