HMRC has issued a consultation document that sets out proposals to collect Capital Gains Tax on disposals of residential properties within 30 days from the date of disposal. These new rules are expected to become law with effect from 6 April 2020.
Under the existing rules, payment of Capital Gains Tax is due for payment on 31 January following the previous tax year ending 5th April. This means you have between 10 and 22 months following disposal to pay your Capital Gains Tax.
This is illustrated as follows:
- Sold residential property 30 March 2018, Capital Gains Tax due on 31 January 2019.
- Sold residential property on 30 April 2018, Capital Gains Tax due on 31 January 2020.
- From 2020 sold residential property on 30 April 2020 Capital Gains Tax due 20 May 2020.
Any underpayment or over payment will be reflected in your self-assessment return.
For further advice on Capital Gains tax contact your local MFW office.