By Neil Driver, Director at Davis Grant
The deadline for UK land and property owners to report and pay Capital Gains Tax (CGT) has doubled from 30 days to 60 days.
Rishi Sunak, the Chancellor of the Exchequer, announced the move in the Autumn Budget – with it taking immediate effect on completions dated on or after 27 October 2021.
It gives taxpayers twice as much time to report and pay any tax after selling property in the UK.
CGT is predominantly due on the sale or transfer of second homes, let properties or homes with significant grounds that generate a gain (profit) following their disposal. Most main residences are exempt from CGT due to Principal Private Residence (PPR) Relief.
When a mixed-use property is disposed of, the 60-day payment window will apply only to the residential part of the property gain.
For non-UK residents disposing of any type of land or property in the UK, whether directly or indirectly owned, the deadline also increases from 30 days to 60 days.
Although the change gives people longer to report their gains to HMRC, the window still remains fairly small and so it is important that they take immediate action following the sale of an investment property to report any gains.
There may be various reliefs or opportunities for some taxpayers to reduce a potential CGT bill, so it is recommended that you seek advice beforehand.
For any advice on tax on property transactions and income, please contact us.