Under new legislation, if you are UK resident and own a residential property, you will need to report and pay capital gains within 30 days of completion...
Summary of proposals
The consultation extends the non-resident capital gains tax (NRCGT) regime to UK resident individuals and trustees with a few modifications.
UK residents who dispose of residential property on or after 6 April 2020 will be required to deliver a return to HMRC and pay any CGT due within 30 days of completion. Where no tax is due (eg, where private residence relief applies, or for overseas property, any UK tax is fully offset by foreign tax paid) or there is a loss, no CGT return is required, although reporting may still need to be made on the individual’s self assessment return.
Non-UK domiciled individuals disposing of overseas residential property will also not be required to submit a return or pay tax provided they are taxable on the remittance basis for the tax year of the disposal.
In an effort for consistency across the CGT regimes, the existing definition of ‘residential property’ found in TCGA 1992 Sch B1 will apply, so all the current complications of what is “suitable for use as a dwelling” are similarly imported into the new regime and actual use of the property will be ignored.
The NRCGT rules themselves will be modified, so that the current payment deferral which applies where the non-resident is subject to an ATED charge or is otherwise within self assessment (eg, as a non-resident landlord) will disappear from 6 April 2020.
Unlike “resident CGT” returns, however, an NRCGT return will still be due even if no CGT is actually payable. Quite why HMRC choose to complicate compliance obligations in this way is baffling, especially when as it states the rationale for change as making CGT “simpler”.
Comments