The deadline for paying capital gains tax after a buy to let or shared home sale is due to shorten to just 30 days for landlords.
HM Revenue & Customs has published a consultation outlining the new rules that bring UK landlords in line with overseas landlords for paying CGT.
From April 2020, home owners must make a tax payment on account when they sell, give away or otherwise dispose of a property.
The 30-day CGT payment deadline runs from the date of completion of the sale or disposal.
Property includes selling land that includes a building suitable for using as a home, off-plan homes yet to be built and binding options or such sales.
Tax payments will be offset against any CGT or income tax due when the year’s self-assessment return is submitted.
Currently, UK landlords pay CGT between 10 months and 22 months after a home is sold.
No CGT will be charged on a landlord’s private home or ‘no gain, no loss’ transfers to a spouse or civil partner.
Property owners must send a ‘payment on account’ tax return to HMRC with the CGT payment.
“A person will be able to correct an amount paid or payable on account when they have failed to consider information available at the time the payment on account calculation was made,” says HMRC.
If the taxpayer files a self-assessment return dealing with other gains or income, a full CGT must be completed as well.
“Amounts paid on account will be credited against the tax due for the year (that is, the total income tax and CGT due). The resulting balance becomes either payable to HMRC or repayable along with interest from HMRC,” says the consultation report.
The consultation closes on June 6, 2018