If you are a UK resident taxpayer and you dispose of or sell your property, under new changes in regime introduced on the 6th of April-2020, you are required to finish and submit Captain Gain Tax (CGT) return within 30 days of the disposal. This article deals with changes in the CGT regime for UK resident taxpayers.
If the property being disposed of is held jointly, each owner will submit a separate UK Land Return to pay the tax in regards to his share of the disposal. However, there are exceptions if:
- There is no taxable gain on the disposal
- If you make a loss on the disposal
- If the disposal is No-Loss No-Gain transfer—the one between a married couple—then, you are not required to file CGT return within a 30-day period.
- The losses have arisen during the tax year from other disposal of assets on the completion date of the sale of the residential property.
However, under the new changes in the CGT regime for UK taxpayers, UK residents are still required to mention the disposal in their self-assessment returns.
UK TRUSTEE
UK resident individuals, trustees, and personal representatives who dispose of residential property in the UK need to file a CGT on UK property return and pay any notional CGT due on the disposal within 30 days of the date of completion.
Read Also: Changes in the CGT Regime for Non-Resident Taxpayers
Where the gain is fully covered by a CGT relief, brought forward losses, or the annual exemption, there is no requirement to file a CGT on UK property return or pay CGT on the account.
Now the question arises who could be caught by these rules?
And the answer is:
- Individuals/partnerships
- Married couples/partnerships
- Non-resident UK taxpayers and UK resident taxpayers
- Personal representatives of the trust
However, disposals by the following will not fall within the ambit of new CGT changes:
- Companies
- Charities
- Pension schemes
- And most collective investment schemes
Also, if the UK resident taxpayer or non-resident taxpayer disposes of their overseas properties, then they are not required to submit CGT return within a 30-day time period.
As stated above, you are compelled by the new CGT regime to inform UK Property Service about the disposal within 30 days irrespective of:
- The amount of the disposal is not taxable
- Disposal results in a loss
- Or you are registered with HMRC for self-assessment
Besides informing the UK Property Service, you are also required to pay CGT, if you are a non-resident taxpayer, within 30-day of conveyancing or completion of salee. Failing to do so will result in penalties.
Penalties for non-filing returns
If you fail to report the disposal within 30-day of conveyance and do not pay the tax due, a late failing penalty will be slapped on you and interest will also be charged.
The following are the penalties:
- If you fail to report and pay the tax for up to 6 months, you will be charged penalty worth £100;
- If you fail to report the disposal and pay due tax by more than 6 months, you’ll be slapped with a further penalty worth £300 or 5{f5c46dbfd7a370437117a81398f3ac99c38e148024d17c03e20eb6cfc854a7af} of tax due, whichever is greater;
- And, if you don’t report the disposal for more than 12 months, then a further penalty of £300 or 5{f5c46dbfd7a370437117a81398f3ac99c38e148024d17c03e20eb6cfc854a7af} of tax due, whichever is greater will be charged to you.
Changes in the CGT Regime For UK Resident Taxpayers: Other Key Points
- Joint Ownership: If the property being disposed of is in joint ownership, then each of the owners will separately report to HM Revenues and Customs (HMRC) about their loss or gain.
- One Property One Return: If you dispose of two or more properties, then you’ll complete a separate CGT return for each one of them.
- However, if you dispose of two properties and they have the same completion date, then you can submit one CGT return as it’ll be sufficient.
