Tax Planning
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Important Update for Property Owners: Capital Gains Tax Rules in 2025
Property owners are reminded of the ongoing rules introduced in April 2020, with specific requirements for reporting and paying Capital Gains Tax (CGT) on property sales. These rules apply to both UK residents and non-UK residents, with updates ensuring quicker compliance and payment processes.
Key Points for UK Residents
From 6 April 2020, UK residents selling residential property must:
- Report the sale to HMRC within 30 days of completion.
- Pay any Capital Gains Tax owed within the same 30-day window.
For some property owners, this streamlined process removes the need to register for Self Assessment if they meet the reporting and payment obligations directly.
Key Points for Non-UK Residents
Non-UK residents selling residential or non-residential property in the UK must:
- Notify HMRC of the sale within 30 days, whether or not there is a tax liability.
- Pay any CGT owed within the same timeframe.
Non-UK residents can no longer defer payment by including it in their Self Assessment return.
New Online Service for Reporting and Payment
HMRC has introduced a dedicated online service to simplify the process of reporting property sales and paying CGT. This service ensures quicker and more convenient compliance.
When to Report and Pay CGT
Property owners may need to report and pay Capital Gains Tax in cases such as:
- Selling a property not used as a main residence.
- Disposing of a holiday home.
- Selling a rental property used for residential letting.
- Disposing of a property inherited that was not used as the owner’s main residence.
Avoid Penalties
Failure to meet the 30-day reporting and payment deadline may result in:
- Late filing penalties.
- Interest on unpaid tax.
Plan Ahead for Compliance
Property owners should:
- Keep detailed records of property transactions, including acquisition and disposal dates, purchase and sale prices, and any allowable expenses.
- Use HMRC’s online tools to calculate CGT liability and make prompt payments.
- Consult a tax advisor for complex transactions or to ensure compliance with updated regulations.
This streamlined process highlights the government’s commitment to efficient tax collection and ensures property transactions are processed quickly and transparently. Whether you’re a UK or non-UK resident, adhering to these requirements is essential to avoid penalties and stay compliant with HMRC’s rules.
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