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Sale of Residential Property in the UK from 6th April 2020 New CGT Rules

We realise that conveyancers have lots to distract them at the moment, so we just wanted to ensure that you did not miss the new rules that come into effect from the 6th April 2020.

As from this date, vendors of residential property will have to make a declaration to HMRC and pay any Capital Gains Tax (CGT) due within 30 days of the date of completion.

We would suggest that your initial advice letters on sales are amended to inform your clients of the new rules and advise them to take tax advice from their accountant or tax adviser.

You may also wish to ensure that the client is notified in writing on the day of completion that completion has taken place and that the clock is therefore ticking to make the necessary return and payment to HMRC.

The HMRC website states that no return is required in the following circumstances:-

  • a legally binding contract for the sale was made before 6 April 2020
  • the clients meet the criteria for full Private Residence Relief
  • the sale or disposal was made to a spouse or civil partner
  • the gains (including any other chargeable residential property gains in the same tax year) are within the clients’ tax free allowance (called the Annual Exempt Amount)
  • the client sold the property for a loss
  • the property is outside the UK

https://www.gov.uk/government/news/get-ready-for-changes-to-capital-gains-tax-payment-for-uk-property-sales

You can download detailed guidance via the above link.