Capital Gains Tax Changes – What You Need to Know

As the property market emerges from lockdown accompanied by a helpful temporary freeze on Stamp Duty, sellers liable for Capital Gains Tax need to be careful they don't fall foul of recent changes relating to the tax.

From April 6, if you're a UK resident and sell a residential property in the UK, you'll have 30 days to tell HMRC and pay any Capital Gains Tax owed, using its new online service.

If you don't, you may be sent a penalty as well as having to pay interest on what you owe - so it's important that everyone involved in a sale fully understands these changes, which affect both UK and non-UK residents.

Landlords looking to dispose of multiple properties could be particularly affected and should take specialist tax advice before embarking on selling their assets, to make sure they are aware of any liability.

What Is Capital Gains Tax?

Capital Gains Tax is a tax on the profit when you sell or dispose of something and often it relates to a property that's increased in value.

If you live in the UK, you may need to report and pay Capital Gains Tax when you sell or dispose of:

• a property that you've not used as your main home
• a holiday home
• a property which you let out for people to live in
• a property that you've inherited and have not used as your main home.

However, you won't have to make a report and make a payment when:

• a legally binding contract for the sale was made before 6 April 2020
• you 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 your tax free allowance (called the Annual Exempt Amount)
• you sold the property for a loss
• the property is outside the UK.

Rules for Non-UK residents

If you live outside the UK, you must continue to report sales or disposals of interests in UK property or land, regardless of whether there is a Capital Gains Tax liability - within 30 days of completion of the sale or disposal.

You will no longer be able to defer payment of Capital Gains Tax via your Self Assessment return and any tax owed must be paid within the 30-day reporting and payment period.

This includes disposals of residential properties, non-residential properties and indirect disposals.

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Why Giltinan and Kennedy?

We pride ourselves on being one step ahead of changes in legislation which affect you and your business. As a small business, we know how financial pressures can impact negatively on your wellbeing and how great it feels when someone 'has your back'.

Working with me and my hand-picked team, you have access to my many years' experience as a financial accountant and small business owner. You will feel supported every step of your business journey.

We're always striving to improve our service to clients and our quarterly complimentary business reviews or Business Support Sessions for new clients, saves you £200 per meeting.

The no-pressure meeting (currently by phone or video call) will cover how we can support you with robust and up-to-the-minute business and financial planning.

And if you recommend us to a friend and they go ahead and work with us, we'll make a £50 donation to the NHS.

We can:

• ensure you save on tax costs and pay competitive fees for your accounts
• provide a complete, objective, service, with the benefit of calling on our wide range of professional partners
• be proactive, ensuring we are up to date with the latest changes and legislation
• offer a fixed fee tax return service to help you budget.

And if you recommend us to a friend and they go ahead and work with us, we'll make a £50 donation to the charity of your choice.

Why me?

I understand the pressures you face and I tailor my services to meet your changing needs.

As well as general accountancy and extensive tax skills, myself and another partner also have individual specialist skills which enable us to provide you with a comprehensive, first-class service.

This means that you can stop worrying about your finances and instead be reassured that your accounts and any tax work will be carried out by my qualified and experienced accountants. They will never be delegated to unqualified staff or subcontracted, as is increasingly the case with other practices.

I provide a high quality service at a reasonable price, within budget. There are no hidden extras and we agree all fees in advance. Get in touch with me on 01403 337490.