Don't forget - CGT is now due on rental property sold this year
It’s that time of year again when anyone who has to fill out a self-assessment tax should ensure they’ve not forgotten anything the tax man needs to know about. So if you sold a rental home in the last 12 months, don’t forget to declare it to HMRC. Taxpayers have until 31 January 2021 to declare any profit made from selling a UK residential property, which was not their main home, during the 2019 to 2020 financial year, and pay the Capital Gains Tax that is due.
However, this is the last tax year that Capital Gains Tax on the sale of properties has to be paid as part of the self-assessment process, so it’s important that property owners understand the new requirements.
Since 6 April 2020 there have been changes to how customers declare and pay Capital Gains Tax and these affect landlords disposing of a rental property. UK residents who make a Capital Gain where there is tax to pay, should use the online service to inform HMRC and must now pay the tax due within 30 days of completion. Non-UK residents disposing of UK land and property should also use the online service, regardless of whether there is a gain or not.
Customers will still be required to inform HMRC of any Capital Gains Tax liabilities on their 2020 to 2021 self-assessment tax return, but any payments that have already been made will not count towards their annual tax return bill.
Customers must continue to complete their tax return as now for any other Capital Gains Tax declarations in the future. They will pay tax on any profit, above their tax-free allowance, when they sell:
- most personal possessions worth over £6,000, apart from their car
- their main home if they have let it out or used it for business
- business assets
You can find out more about the changes to declaring and paying Capital Gains Tax on GOV.UK.
Author : Maryanne Bowring
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