By Neil Driver
According to a new survey, a quarter of Landlords have been left baffled by the ever-changing regulations related to the private rental sector.
The study by Direct Line Insurance showed that near a third of landlords felt it was too difficult to keep up with the pace of change, while one in six property investors said the constant change was stressful.
As a result of the confusion, stress and additional administration created by regulatory change, a third of those surveyed had been tempted to sell up.
A big problem is a lack of support, with a fifth saying they couldn’t afford to constantly seek professional advice.
Of the changes that were being made to private residential rental rules, one in seven were unaware of incoming sustainability and energy requirements, which could carry substantial costs.
On top of this around 10 per cent were not aware of the various changes to Capital Gains Tax filing deadlines should they decide to sell a property.
How to report CGT on investment properties
Any Capital Gains Tax (CGT) due on UK residential property disposals made by UK residents must be reported and paid within 60 days of completion.
Who is affected?
Those who own a property other than their main residence will have these CGT rules applied to them.
This includes let properties, second or holiday homes and homes with significant grounds and gardens, as they may not benefit from Principal Private Residence (PPR) relief.
To report the sale of a UK residential property to HM Revenue & Customs (HMRC) it may be necessary to create a Capital Gains Tax on property account. This will allow you to:
- Report the disposal of UK residential property or land;
- Pay any tax owed for that disposal; and
- View previous and current returns.
Whilst there are some exemptions from completing a return, for example where no tax is due, the short deadline gives limited time to retrieve supporting documentation, prepare CGT calculations or obtain valuations if needed.
Non-UK residents must also report all sales or disposals of UK property (residential and non-residential) within 60 days – even if there is no tax to pay or they have made a loss.
It is easy to overlook these requirements during the sale of a residential property, but this information must be reported to HMRC within this new time frame and any tax paid.
Penalties and interest for late filing are no longer linked to the tax return filing deadlines, which were previously made on an annual basis.
Penalties could now start within 60 days of completion – so you must act quickly.
The new rules surrounding CGT on property sales are complex and so it is worth seeking advice if you are unsure of how this affects you or those you support.
If you have any queries about the CGT implications of selling a property or you have other concerns about property tax, please speak to us.