Tax advice for selling a second property during Coronavirus

From 6 April 2020, HMRC have introduced a 30 day reporting requirement for disposals of residential properties where a taxable capital gain arises – this can include gifts where no consideration is payable. 

What is a Capital Gains Tax? 

Capital Gains Tax (CGT) is a tax on the profit when you sell (or 'dispose of') something (an 'asset') that's increased in value. It is due on any such disposal (unless an exemption applies) and under the new rules is payable within 30 days after the date of completion where the asset sold is residential property.

Planning when you exchange and complete on the sale will affect how quickly you are required to pay your Capital Gains Tax bill.

When you have to pay your Capital Gains Tax bill depends on when you exchange contracts

If you have already exchanged contracts, but completion is set to take place on 6 April 2020 or later (whether or not this is due to Covid-19), the CGT reporting and payment will be due on the same date as your normal self-assessment tax return (31 January 2021). However, if both exchange and completion take place on or after 6 April 2020 (whether or not this is due to Covid-19), the 30 day reporting rules will apply.

The gain should be reported online, and the CGT is calculated based on your expected income and other capital disposals for the year, together with any reliefs available.

Talk to us about your Capital Gains Tax!

Because the process of calculating the gain is complex, it is important that you tell us as soon as possible when you know that you will be disposing of a residential property. We can then advise you on the information required to ensure you meet the deadline.

If you are planning to sell or otherwise dispose of a residential property, call us and ask to speak to our Tax Team on 01743 273273.

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