Changes to Payment of CGT on Residential Investment Property Explained

As the end of the year approaches, anyone who needs to complete a self-assessment tax return should ensure they’ve declared everything required by HMRC. If you sold a rental property in the past 12 months, don’t forget to report it. Taxpayers have until 31 January 2021 to declare any profit from selling a UK residential property (not their main home) during the 2019–2020 financial year and pay the Capital Gains Tax (CGT) due.

End of Self-Assessment CGT Declarations

The 2020–2021 tax year is the last in which CGT on property sales must be paid as part of the self-assessment process. This makes it essential for property owners to understand the new requirements and ensure compliance moving forward.

Capital Gains Tax and Its Impact on Landlords

Since 6 April 2020, changes to CGT declaration and payment processes have taken effect, impacting renting-homes-wales-act-how-will-it-impact-landlords'>landlords who sell rental properties. UK residents making a taxable capital gain must now use the online service to report it to HMRC and pay the due tax within 30 days of completion. For non-UK residents selling UK land or property, reporting via the online service is mandatory—whether or not a gain has been made.

What Landlords Need to Know About New CGT Rules

From 2020–2021 onwards, property sellers must:

• Use HMRC’s online service to declare capital gains and pay any tax owed within 30 days of selling the property.
• Report any CGT liabilities in their self-assessment tax return, though any payments already made won’t count toward their annual tax return bill.

What Is Subject to Capital Gains Tax?

renting-homes-wales-act-how-will-it-impact-landlords'>Landlords and property owners must pay CGT on any profit exceeding their tax-free allowance when selling:

• Most personal possessions worth over £6,000 (excluding cars).
• Their main home if it has been rented out or used for business.
• Shares.
• Business assets.

Staying Compliant with HMRC Regulations

With these new changes in place, renting-homes-wales-act-how-will-it-impact-landlords'>landlords and property owners must adapt to the updated CGT reporting process. Understanding the deadlines and using HMRC’s online system will help avoid penalties and ensure a smooth tax reporting experience.