As a result of the recent stamp duty holiday introduced by the UK Government in July 2020, there has been an increase in landlords and individuals selling or attempting to sell their properties.
Although landlords and other property owners, currently have up until 31st March 2021 to benefit from this scheme, there is something they should be mindful of when attempting to dispose of their assets – and that is Capital Gains Tax.
What had not been commonly known up until recently, is that if a taxable gain is made by a UK resident when they sell or gift a UK residential property to another person, they will now be obligated to report and pay any Capital Gains Tax (CGT) within 30 days of the transaction being completed.
CGT is a tax which is incurred by a person when they sell or dispose of an asset which has increased in value.
The amount of CGT a person is required to pay will depend on the sum gained and the rate at which a person pays income tax (i.e basic rate or higher rate tax payer).
CGT must be reported and paid by a person to HMRC if a gain is made when they sell or dispose of the following;
UK residents who either sell or gift a UK residential property to another person are now required to report and pay any CGT within 30 days of the transaction being completed.
Previously, UK residents had up to 22 months to report and pay any CGT due.
The new deadline has been in place since April 2020, however many conveyancers, estate agents and tax professionals were not aware of the implications of the rule change until recently, as it was not widely publicised.
Reported: | Paid: | |
Within 30 days | £100.00 Fine | HMRC will impose an initial fine of 5% (of the value of the CGT) onto your CGT bill. |
Within 3 months | Daily fine of £10.00 charged (can be increased up to a maximum of £900.00) | N/A |
Within 6 months | HMRC will add a further 5% (of the value of the CGT) to your CGT bill or a charge of £300.00 if this proves to be greater. | HMRC will impose a further fine of 5% (of the value of the CGT) onto your CGT bill. |
Within 12 months | HMRC will add a further 5% (of the value of the CGT) to your CGT bill or a charge of £300.00 if this proves to be greater. | HMRC will impose a further fine of 5% (of the value of the CGT) onto your CGT bill. |
If you require assistance selling property or require advise on any other property matters, please do not hesitate to contact our team on 0191 232 9547.
What Is Parental Responsibility (PR)? Parental responsibility is the right of a person to make…
Difference between will and Lasting Power of Attorney It is a common misconception that if…
Living in the North-East, it is well known that we get much more for our…
Rules of intestacy If a person has died without a Will, their estate will be…
Immigration Health Surcharge rising from 6 February 2024 The Home Office announced a 66% increase…
Are you worried about what will happen to your estate if you die without a…