Capital Gains Tax
Since 6 April 2020 if a property is being sold or gifted (and it is not exempt from Capital Gains Tax; e.g. it is your main home) then you will now be required to calculate the Capital Gains Tax that has arisen and tell HMRC about it within 30 days of the date of completion. You will also be required to make a payment for the amount that you consider is the correct amount in the same time.
In order to complete the return, you will need to know the following information:
- The full address and postcode of the property
- The date you acquired/bought the property and the value at that time
- The date you exchanged contracts when you were selling the property or the date of the gift
- The date you stopped being the property’s owner (completion date)
- The value of the property when you sold or disposed of it
- Any costs of buying, selling or making improvements to the property
- Details of any tax reliefs, allowances or exemptions you are entitled to claim
- What is the type of property?
Late filing penalties
If you fail to file a report on time and make an appropriate payment – this will result in automatic late filing penalties of £100 which apply as soon as the 30-day deadline is exceeded. Further penalties of up to 10% of the tax at stake may apply when returns are submitted more than 12 months late.
It is therefore very important that when you are selling or disposing of a property that you are able to collate all the information you need to be able to fill in the return in the required time frame to prevent any unnecessary penalties.