HMRC introduce new Capital Gains Tax Return if disposing of UK residential property effective 2020/21 tax year
If you sell or dispose of a property that is not your main home and it's value has increased since you acquired it you may have to pay Capital Gains Tax. Some of your property costs can be deducted when working out your taxable gain so you will need a record of:
when you bought or acquired it
when you sold or disposed of it
the purchase and sale price
any buying and selling costs, like Stamp Duty and legal fees
improvement costs and dates
You may qualify for other reliefs or allowances depending on how long you have owned the property and if it was ever your main home.
If the property was used for a furnished holiday letting business there are special Capital Gains Tax reliefs.
Following the changes to capital gains an owner who makes a disposal of a UK residential property is now required to file the newly introduced Capital Gains Tax Return to HMRC.
This Capital Gains Tax Return is in addition to the annual Self Assessment Tax Return (SATR) with the deadline to file this and pay any capital gains tax being within 30 days of completion of the disposal.
If the disposal is not reported within 30 days a late filing penalty will be issued.
If the interest in the residential property was held jointly, each individual must file a Capital Gains Tax Return separately notifying their own share.
The above also applies even if you have disposed of only part of an interest in a UK residential property.
As the deadline is very tight careful planning is of great importance.
Unless you have a detailed knowledge of the associated rules we would suggest that you let us handle this for you as the area of capital gains is a complex issue.
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