Capital Gains Tax: new rules for disposal of UK land and property

The time limit to report and pay Capital Gains Tax (CGT) on UK land and residential property has doubled from 30 to 60 days.

The notice comes after HM Revenue & Customs (HMRC) published new guidance on the most recent tax changes relevant to the legal profession.

As part of this year’s Autumn Budget, the Government announced two major changes to the CGT Payment for Property Disposal (PPD) service rules.

The first doubled the time limit customers have to report and pay any tax due on UK land and property sales, from 30 to 60 days. HMRC said the move will allow more time for vendors to produce and provide accurate figures as well as sufficient time to engage with advisers, such as an accountant.

The new rules apply to all disposals on or after 27 October 2021. If the sale was completed before this date, the 30-day rule will still apply.

The second major change relates to the tax rules around mixed-use property – defined as property that has both residential and non-residential elements. The new rules for UK residents clarify that, where a gain arises in relation to a mixed-use property, only the portion of the gain that is the residential property gain is to be reported and paid via PPD.

Non-residents, meanwhile, may have to submit a tax return even where there is no CGT to pay or where the property is not residential.

Click here to access Agent Update: Issue 90.

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