We wanted to let you know about changes to Capital Gains Tax coming up in April 2020. The amount of Capital Gains Tax is not affected; the changes relate to when the tax needs to be paid.
Who has to pay Capital Gains Tax?
If you own a property that was your primary residence, but it has been empty or rented out for a while before you sell it then you need to pay Capital Gains Tax. From April 2020 if the property has been vacant or rented out for nine months this tax will apply to you. This also applies if you transfer the property into a trust or gift it to a family member.
Capital gains Tax also affects landlords and property developers when they sell their property.
What are the changes from 2020?
Currently when you sell your property and you have until the 31 January of the following year to pay your tax along with, your self-assessment payment. So, for example, if you sell your property in February 2019, you wouldn't need to pay your Capital Gains Tax bill until 31 January 2021. This gives you plenty of time to plan and ensure that you have the funds to pay.
From 6 April 2020, the HMRC has decided that Capital Gains Tax must be made within 30 days of selling or transferring the property to a family member. If the payment is not made in time, the HMRC has stated that they may charge interest or impose penalties.
This change will have a significant impact on financial planning for all those that are required to pay Capital Gains Tax, especially in situations where the property has been put into a trust or gifted to a family member.
If you would like any advice on how you can reduce your tax liabilities or manage the payments to the HMRC, please do contact us.
You can call 01623 490 120 or email