New tax deadline for property sales

The 6 April 2020 will see a seismic change in the deadline for UK residents that sell a residential property when Capital Gains Tax (CGT) on the sale is due. Currently, the due date for paying any CGT you owe to HMRC is the 31 January following the end of the tax year in which a capital gain was made. This deadline gave taxpayers between 10 and 22 months to settle their CGT bill.

The deadline will change for UK residents from 6 April 2020. This change will mean that any CGT due on the sale of a residential property will need to be reported and a payment on account of any CGT due (an advance payment towards their tax bill) made within 30 days of the completion of the transaction.

This means that there will be a significant difference in your CGT payment date if you sell a residential property before the end of the current tax year compared to making a sale in the new tax year. The payment date for any CGT due on residential property sales made before 6 April 2020 will be 31 January 2021. Any CGT due for residential property sales on or after 6 April 2020 will be due within 30 days of completion.

For non-UK residents, these CGT changes came into effect from 6 April 2019.

In practice, this change will apply to the sale of any residential property that does not qualify for Private Residence Relief (PRR). The PRR relief applies to qualifying residential properly used wholly as a main family residence. The new tax deadline will mainly apply if you are disposing of a second / holiday home, an investment rental property or a home that does not qualify or only partially qualifies for PRR.