At present, capital gains tax is payable on 31 January following the end of the tax year in which the gain takes place. This rule is about to change for residential properties.
As from 6 April 2020, if you are selling a residential property on which capital gains tax may be payable, you will have to send in an online return to H M Revenue and Customs and pay the tax due within 30 days of the completion of the sale.
Capital gains tax may be due on the sale of any property unless it has been your main residence for the whole of the time during which you have owned it. If it takes up to 18 months for you to sell it after you have moved out, it can still count as your main residence for those 18 months. That time period is to be reduced to 9 months from 6 April 2020.
If you think you may in future have a capital gain on a property, may I suggest you get in touch with us as soon as possible so that we can advise on which information will be needed to calculate the gain, and how much capital gains tax you may have to pay.
We suggest that even if you are not planning to sell a property at the moment, it would be helpful to get in touch to discuss what information will be needed on the property should it come to be sold. We will then be in a position to produce tax estimates and advise on any action you should take.
Please bear in mind this is general guidance only. Advice should be taken relevant to your particular circumstances before action.
– By Stephen Handley, FCCA