This regime, which applies only to residential properties, introduces strict penalties for late filing and payment, making it essential to meet the deadline and ensure compliance with HMRC requirements.
Let’s break it down:
1.
Individuals (but not companies), trustees, and personal representatives who sell residential property and make a capital gain have to report and pay within 60 days of completion.
2.
It only applies to residential property and not commercial. Where there is a mixed element, for example a shop with flat above, the gain will need to be apportioned (divided and shared) and the 60-day declaration completed for the sale of the flat.
3.
If no CGT is payable on the gain, there is no requirement to complete the CGT file and pay.
4.
Registration with HMRC for a property account will be required, using your government gateway user ID and password.
5.
If multiple properties are sold within a year, multiple returns will need to be completed.
6.
This regime also applies to second homeowners where a property is sold.
7.
There are penalties for late filing and interest for late payment. HMRC are beginning to clamp down on these now after being lenient for the first few years.
£100 initial late filing penalty:
If you don’t file your CGT return by the 60-day deadline, you will incur an immediate penalty of £100.
If >6 months late:
If your CGT return is more than six months late, you will face an additional penalty.
This penalty will be the greater of:
– 5% of the CGT due (this means if you owe £1,000 in CGT, the penalty would be £50).
– £300 (if 5% of your CGT due is less than £300, you will instead pay the fixed penalty of £300).
If >12 months late:
If your CGT return is more than 12 months late, you will incur another penalty, which is again the greater of:
– 5% of the CGT due (this means if you owe £1,000 in CGT, the penalty would be £50).
– £300 (if 5% of your CGT due is less than £300, you will instead pay the fixed penalty of £300).
8.
This CGT reporting is in addition to declaring the gain on the normal self-assessment return and not instead of.
9.
If the residential property is held jointly, each owner will be required to complete a CGT return.
10.
Gains arising on overseas properties are not part of this new regime.
11.
Payment of the CGT can be made via bank transfer, debit card or corporate credit card, using the CGT payment reference number.
If you are considering selling, or are in the process of selling, a residential property speak with us as soon as possible so that we can ensure that you meet the 60-day deadline.
You call call us on 01872 267 267
Email us contact@whyfield.co.uk
Or message us on WhatsApp: 0777 49 39 111