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Residential property gains: CGT payment date proposals

The Government is currently consulting on a proposal that, from April 2020, anyone disposing of a UK residential property which does not qualify for main residence relief, (such as a second home or a rental property), will need to make a payment on account of the CGT due on any gain within 30 days of the disposal. At present payment is not due until the normal self-assessment filing and payment date, 31 January following the end of the tax year in which the disposal took place.

The idea is that payment will then be deducted from the taxpayer's total income tax and CGT liability for that tax year, taking into account any adjustments to the liability due to factors which may only be known at the end of the tax year, such as the taxpayer's total losses and income for that year.

Some non-residents already have to pay CGT within 30 days, but the proposal would remove the current ability to delay payment of CGT for those who file self-assessment returns. However, unlike non-residents, UK residents will not need to file a return unless CGT is actually payable.

Whilst the motivation for the change is simplicity, there are many practical complexities with the proposals which we hope will be ironed out in the consultation process.

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