Thinking Of Selling A Property?

If the change to tax relief on mortgage interest hasn’t been enough for residential landlords to contend with over the last few tax years there’s another change coming into play from 6th April 2020.  This relates to the requirement for reporting capital gains on sales of residential property and will also affect other property owners such as those with second homes.  The current system requires gains to be reported and tax to be paid by 31st January following the end of the tax year in which the disposal takes place.  Unfortunately, this will no longer be the case from 6th April 2020 when gains will need to be reported through submission of a ‘residential property return’ within 30 days of the completion date and an estimate of the tax will need to be paid within this time period.  

The rate at which capital gains tax is paid is dependent on other income so an estimate of this other income will need to be calculated so that the correct CGT rate is applied.  If the result of the calculation indicates that no capital gains tax is payable then the return is not required.

There are also changes being introduced relating to the reliefs available when selling property that was previously your principal private residence so if you’re thinking of selling in the near future you may want to consider how the changes may affect you.

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October 10, 2019

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