Residential Property Sellers Are Given More Time To Settle CGT Bill
Released On 22nd Nov 2021
Before the Budget, there was some suspicion that personal taxes might be at the forefront of the Chancellor’s announcements. However, that turned out not to be the case with this area of taxation receiving relatively little attention in the speech itself.
The Chancellor made no mention of Inheritance Tax (IHT) reforms that had been predicted in some quarters.
As expected, the planned increase in fuel duty was cancelled. In the public sector, pay freezes will be lifted and there was confirmation that the National Living Wage will rise to £9.50 in April 2022.
However, one change not announced in the Budget itself, but confirmed in documents published after the Chancellor delivered his speech was that the deadline for paying Capital Gains Tax (CGT) on property would be extended from 30 to 60 days.
Although the majority of homeowners do not pay CGT on the sale of their main home, thanks to Private Residence Relief (PRR), the sale of a second home, holiday let or home with significant grounds may attract CGT.
This amendment to the tax deadline is expected to affect around 150,000 individuals who make a disposal of UK residential property each year and are required to file a UK Property tax return within 30 days. Of this number 85,000 make a taxable gain.
The Office for Tax Simplification had previously stated that it considered 30 days a “challenging deadline”. It instead recommended a return to 60 days and it would appear that the Government has heeded this advice.
The change came into immediate effect and applies to any completions made on or after 27 October 2021.
If you are considering selling a second home or Buy to Let property it is essential to get advice on this before proceeding with the sale.
There may be claims you can make to reduce the tax payable and at the very least you need to know how much tax will be due before you commit to making a sale.
For more information and advice on issues relating to Capital Gains Tax, please get in touch with the team.
