20 Oct 20
From 6 April 2020, there were significant Capital Gains Tax changes that dramatically affect the tax paid on residential property sales by private UK individuals.
Certain disposals of residential properties are required to be notified to HMRC within 30 days of the completion. A CGT return will need to be completed and submitted to HMRC, along with a mandatory payment on account (where applicable). This is a big change from where the gain only used to be reported (and paid) with your Self-Assessment return.
The new rules apply for any UK residential investment properties which contracts were exchanged after 6 April 2020.
Higher-rate taxpayers pay 28% on gains from residential property, while basic-rate taxpayers pay 18% (or 28% depending on the size of your gain, your taxable income and amount above the basic rate). You do get a annual allowance against CGT, but regardless of this the gain must still be reported.
Sold a residential property? Talk to us about your tax obligations.
Read the DonnellyBentley article here >>>
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