On 6 April 2020 new tax rules are being introduced which mean that:

• All sales of UK residential property,
– on which there is a chargeable capital gain,
– must be reported to H M Revenue Customs within 30 days of completion;
The tax must be paid at the same time. This may accelerate the tax payment by up to 22 months, negatively affecting your cashflow.
• This applies to UK residents and taxpayers, as well as non-residents.

This is a significant change to the administration of capital gains tax and imposes strict obligations on the sellers of UK residential property.

The rules will mainly impact landlords and second-home owners but it will be more important than ever to check the capital gains tax status of all sales of UK residential properties.

At the same time, H M Revenue & Customs are also amending two important Capital Gains Tax reliefs:

• Firstly, the final exemption period for Main Residence Relief is reducing to a mere 9 months
• Secondly, Lettings Relief, which applies if you have lived in a property as well as letting it out, is also changing. In effect this will no longer apply if you do not live in the property at the same time as your tenants.

Each circumstance will be different, and it is ever more important that you contact us as soon as you decide to sell a UK residential property. Suitably forewarned we can help you meet your obligations under these onerous new rules and plan your cashflow.

If you have any queries, please do not hesitate to contact our Tax Team.

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