From 6 April 2020, the new 30-day reporting and payment window will come into effect for sales of residential property where a capital gains tax (CGT) charge arises. A standalone return will have to be submitted to HMRC within 30 days of completion, along with a payment on account of CGT based on an estimated calculation of the gain.
Disposals made on a no gain/no loss basis (for example, between spouses or civil partners) are excluded from the obligations and they are most likely to affect those selling a second home or rental property on which relief is not available.
Taxpayers will be permitted to factor in realised capital losses and available reliefs into their calculations and any adjustments to the final tax position will be made as part of the self-assessment tax return process following the year end.
Preparation will be key to meeting this tight 30-day timeframe and to keeping the tax payment as close to the correct figure as possible.
Further changes curtailing principal private residence (PPR) relief will come into effect from the same date and two useful concessions are being incorporated into legislation.
An extension to PPR is also being introduced for members of the armed forces who occupy accommodation alternative to their normal home due to job requirements.
As well as a reduction in the final exemption period and changes to lettings relief, a number of technical changes have also been announced to the ancillary reliefs.
If you would like further information on this please get in touch with our team of advisors.