Capital gains tax reporting amendments: extension of filling window

Updated: Jan 27

19 November 2021

The government has provided an extension to the so-called ‘30-day’ reporting rules for capital gains tax (CGT) by doubling the time period to 60 days.For many agents and taxpayers, submitting the necessary return within the original 30-day window has proved a challenge. Landlords, second-home owners, both residents and non-residents, should be aware of the new reporting rules summarises below.


CGT reporting and payment


Since April 6, 2020 UK residents have been required to calculate, report and pay any Capital Gains Tax (CGT) liabilities on the disposal of UK residential property within 30 days of completion via the UK Property Reporting Service. Previously there was reporting only after the end of the tax year via self-assessment.


These provisions primarily affect landlords, and second-home owners.If no CGT liability a rosedUK residentsdid not need to report.


CGT reporting amendments

For residents

The government has taken on board the OTS’ recommendation that more time is needed to prepare and submit these reports and, for disposals that complete on or after Budget Day (27 October 2021), the reporting (and payment) window has been extended from 30 to 60 days. The original 30-day deadline will remain for relevant property disposals completed before Budget Day.


For non-residents

The time period has also been extended for similar reporting rules which apply to non-UK residents. Since April 2019 non-UK residents have been required to report all disposals of UK land (including indirect holdings in property-rich companies) within 30 days of completion – whether or not any UK CGT is payable.


From October 27, 2021, they will also get 60 days to report (and pay) any CGT that is due.


Procedure

  1. All taxpayers need to set up, online, a Property Account in order to proceed.

  2. Taxpayers will get a username and password with which they can access their Property Account.

  3. The alternative is to request a paper form. However, even given the 60-day payment deadline, we do not recommend this option.

  4. You need to report and pay any CGT liability with 60 days of the effective completion date. It's possible to report by yourself or with help of your agent.

  5. For those who, apart from the disposal of the property, would not be required to complete a self-assessment return. It's possible to correct any estimates entirely through the UK Property Reporting Service.

  6. For landlords and others already in self-assessment for other reasons – the disposal is reported again as part of your self-assessment.

Penalty


Missing the deadline will trigger an automatic late filing penalty of a £100 fine. The penalty-free ‘soft landing’ period has been expired.


Summary


All landlords need to be mindful of the new CGT reporting requirements and payment deadline, and challenges associated with subsequent annual Self-Assessment reports.



Lef Capital gains tax reporting amendments extension of filing window
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For further information on any of the points above contact

Mikita Makayou at mikita@lexefiscal.com, or

Dr. Frank at clifford.frank@lexefiscal.com.

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