Are you ready for Capital Gains Tax changes?

HM Revenue & Customs (HMRC) has warned homeowners to prepare for new Capital Gains Tax (CGT) rules, which will see vendors given just 30 days to report and pay tax on investment properties.

Under the new rules, UK residents selling a residential property which isn’t used as their main home – such as a holiday home, property you’ve let out or inherited property which you don’t live in – have 30 days to tell the regulator and pay CGT liabilities.

Previously, homeowners had a two-year window to report and pay tax.

To assist taxpayers in preparing for this change, HMRC has revealed that it will launch a new online service to make it easier to report and pay CGT. The change also means that some taxpayers may no longer need to file for Self Assessment, providing they have no other taxable income to report.

Commenting on the changes, Sarah Kelsey, Deputy Director, HMRC, said: “We want to help customers know exactly what they need to do, as it’s really important that everyone involved with the sale of a residential property fully understands the changes.

“People don’t usually have to pay Capital Gains Tax if they sell the house they live in, but this is a significant change for customers who do have to pay the tax and who up to this point would include the gain in their Self Assessment return.

“There will be lots of help and guidance available to individuals and agents, or those representing trusts, and we are providing a new online service to make it easier for all our customers to both notify and pay online within 30 days.”

Failure to report and pay CGT within the new 30-day window will attract financial penalties plus interest, starting at £100.

Do you need property tax support? For help and advice, get in touch with our expert team today.  

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