A major change to the way Capital Gains Tax (CGT) is reported and paid will come into effect from 6 April 2020.  Currently, the usual due date for paying any CGT owed to HMRC on property disposals is the 31 January following the end of the tax year in which a capital gain was made. From 6 April 2020, any CGT due on the sale of a residential property by a UK resident will need to be reported and paid within 30 days of the completion of the sale transaction.

This change will apply to the sale of any residential property that does not qualify for Private Residence Relief (PRR). The new rules will mainly apply when selling a buy-to-let property or a second / holiday home. The new time-frame will also apply to the sale of any other residential property that does not qualify or only partially qualifies for PRR.

If your clients are likely to be affected by these changes, it would be worthwhile considering a property sale prior to 6 April 2020. For example, if a property is sold at the end of March 2020, any CGT will be due on 31 January 2021. If a property is sold on or after 6 April 2020, the CGT will be due just 30 days later. Interest and penalties will apply if any CGT due is not paid on time.