CGT 30-day payment loophole
An overlooked exception to the rule means that not everyone needs to report and pay capital gains tax (CGT) on UK residential property within 30 days. What is the story?
Anyone disposing of UK residential property that hasa CGT liability must report and pay the tax within 30 days of completion since the changes effective from April 2020. However, for transactions taking place towards the end of the tax year there is an opportunity to delay payment.
The date of exchange is relevant for the tax return reporting, but the 30-day countdown starts when the property transfer completes. This means that where contracts are exchanged during 2020/21, but completion does not take place until 7 March 2021 or later, the 30-day deadline falls after 5 April 2021. It is therefore possible to submit their 2020/21 tax return and, providing this is done before the 30-day deadline, there is no need to report the gain separately or pay the tax within 30 days.
The tax payment deadline will then be deferred until 31 January 2022, and it will save the time, cost, and hassle of reporting it within HMRC’s Capital Gains Tax on UK property account. It also allows the individual to adjust their July payments on account.
Related Topics
-
Uber loses VAT margin scheme appeal
The Court of Appeal has ruled that Uber cannot use the Tour Operators Margin Scheme (TOMS) when accounting for VAT on its ride-hailing services. The decision could have significant implications for businesses that act as intermediaries when supplying services to consumers. What was the dispute about?
-
Investment bond - undercover tax trap?
Inheritance tax is a hot topic but most couples only need to be concerned if they are worth more than £1m. What you don’t hear about is the income tax charge on investment bonds that’s payable on death. Can you reduce the tax bill before it’s too late?
-
When are staff discounts tax efficient?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.