Capital Gains Tax payment period doubled

News at John Francis | 01/11/2021

Article taken from Property Investor Post --- Landlords have twice as long to pay Capital Gains Tax, with the window being doubled from 30 to 60 days in this week’s Autumn Budget. This is applies to UK and non-UK residents who sell property, while the change has immediately come into effect. Chancellor Rishi Sunak made the change after being warned by the Office of Tax Simplification in May 2021 that some taxpayers only find out about their obligations after they have sold their property. The announcement has attracted a positive reaction from accountants, as the 30 day period was seen as a small window to register, work out how much to pay and then finally pay the tax. The 30-day rule came in in April 2020, replacing a system where gains could be reported in a self-assessment tax return in the tax year after the property was sold. The details of the Capital Gains Tax change were in the Budget documents, which said: “This will ensure that taxpayers have sufficient time to report and pay CGT, as recommended by the Office of Tax Simplification.” No other changes were made to the tax, despite speculation that CGT rates could rise to fall in line with income tax – which goes up to 45% – as was proposed by the Office of Tax Simplification in November 2020. Richard Davies, Head of Lettings at Chestertons, said: “We welcome the Chancellor’s decision to not raise Capital Gains Tax. “The tax rise could have presented the final tipping point for landlords to sell their portfolio. The avalanche effect of this would have meant a subsequent decrease in rental properties during a time when UK tenants are already facing a shortage of suitable homes within their budget.” Currently higher or additional rate taxpayers pay 28% CGT on gains from residential property, though basic rate taxpayers pay less depending on the size of the gain and their income.