Tax changes on disposals of UK residential property

There is a relatively new requirement to report and pay capital gains tax (CGT) on disposals of UK residential property made by UK resident taxpayers on or after 6 April 2020. However, amongst taxpayers there is very poor awareness of these new rules including the need to set up a Property Account and due to the time limits this can be costly.

The CGT report is made using a new HMRC online service and the report and payment are both due 60 days after the completion date. This represents a significant change in timing compared to the previous system where such gains were payable anything up to approximately 665 days after the disposal.

The digital service is completely standalone and does not interact with the self-assessment system. Accordingly, it does not use self-assessment accounts or references and existing agent authority (such as a 64-8) is not recognised for the service.

The taxpayer needs to set up a CGT UK Property Account regardless of whether they are reporting the gain themselves or whether they are appointing an agent to report the gain. Only once the CGT UK property account has been set up is it possible for the taxpayer to authorise an agent to report the gain on their behalf.

Reporting requirements for non-UK residents have been in place for longer than for UK residents and they are wider in scope.

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