Wealden Times | WT213 | November 2019 | Gift supplement inside

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Capital Gains Tax: What will
the new payment date mean to you?
HMRC has announced that
from 6 April 2020, the rules
for paying Capital Gains
Tax (CGT) are changing,
and the payment date for tax
liabilities arising on capital
gains made on the disposal
of residential property by
UK resident taxpayers is
being brought forward.
Vikki Logan, tax manager
at Cripps Pemberton
Greenish, explains what
this means for taxpayers.
What is CGT and when
does it occur?
CGT is a UK tax paid on
the increase in value over
its acquisition cost, of a
chargeable asset at the date
of disposal, this includes
residential property that
does not fully qualify for
main residence relief.
The rate of CGT payable
depends on an individual’s
personal circumstances
and the asset concerned.
What are the current rules?
Under the current rules,
UK residents disposing of
a chargeable asset must
disclose the transaction on
their self-assessment tax
return and pay the CGT due by
31 January following the end
of the tax year in which the
disposal takes place. This can
be between 10 and 22 months
after the transaction occurs.
What will change?
From 6 April 2020 any
CGT liability arising on the
disposal of a residential
property will be payable
within 30 days of the
contract for the disposal
completing . A special
‘payment on account’
return will need to be filed
with HMRC at the same
time. Penalties and interest
will be incurred if the 30
day deadline is missed.
The new rules will apply to
all disposals of residential
property whether by way of
sale, gift or transfer into or
out of a trust. Individuals,
trustees and personal
representatives disposing
of residential property
will need to have details
of the sale, or valuations
at the date of disposal
if it is by way of a gift,
as well as the historical
acquisition costs and
enhancement expenditure
readily to hand in order
to meet this deadline.
These changes will apply
to disposals of both UK
and overseas residential
properties as well as
residential properties
where the capital gain is
not fully exempt under
the main residence relief
rules. Special rules
will apply to calculate
the capital gain for the
purposes of making the
CGT payment on account.
The disposal will also
need to be reported on
the taxpayer’s annual selfassessment
tax return.
How can we help?
Cripps Pemberton Greenish
is well equipped to assist with
this process. Our specialist
residential property team can
manage your conveyancing,
and our tax team can help with
calculating the capital gains
tax and reporting to HMRC.
Vikki Logan
For more information,
please contact tax manager,
Vikki Logan on
+44 (0)1892 506 027,
vikki.logan@crippspg.co.uk
or visit www.crippspg.co.uk.
www.crippspg.co.uk @crippslaw This article gives examples and is intended for general guidance only