Key change to capital gains reporting
There is one radical change that may have slipped under the radar of most grappling with the pandemic: changes to how capital gains on the sale or disposal of UK residential properties are to be reported.
Any individual who is a UK resident, that has sold or disposed of a residential property based in the UK (on or after 6 April 2020) may now need to report that transaction to HMRC. This must be done within 30 calendar days of the date of completion, and any capital gains tax arising must be paid within that same period.
This separation of reporting requirements for residential property disposals can be an onerous but essential task. It is of vital importance that all individuals disposing of a residential property (whether in their personal capacity, trustee or personal representative of a deceased individual’s estate) take the appropriate tax advice as early as possible in a transaction (and preferably no later than an exchange of contracts). This is to ensure that HMRC’s reporting requirements can be met in
Failure to do so, or waiting until the following tax year to report gains with other financial or estate tax affairs, could result in the payment of interest and significant penalties.
If you are currently in the middle of a property transaction, administering an estate or trust containing a residential property, or thinking of selling your own property in the near future, please contact us for more information.Email Laura
Laura Stone’s work involves the preparation of wills, lasting powers of attorney, inheritance tax planning, estate administration, and Court of Protection matters.