If you are a second home owner, then one measure in the Budget which was noteworthy was a change in the rules around when any Capital Gains Tax must be paid.
In April 2020, the Government introduced a new rule that anyone selling a property where Capital Gains Tax (CGT) applies needed to settle this liability within 30 days of the completion of the sale.
However this has proved problematic and, following a recommendation from the Office for Tax Simplification, this was doubled in the Budget to 60 days.
The change comes into immediate effect, and applies to all sales completing on or after 27 October 2021. Where mixed-use property is disposed of, the 60-day payment window will apply only to the residential element of the property gain.
So why has the Government made this adjustment from 30 to 60 days?
It has become clear that 30 days is only a very short window for any seller to pay their Capital Gains Tax.
This issue has been exacerbated because HMRC is using a standalone digital service to deal with CGT which does not interact with the self-assessment system. This means anyone new to the system has first to register, and the verification process itself has a few hoops to jump through.
So news of the increase from 30 to 60 days is welcome, but our advice at Optimum is still to plan ahead by registering with HMRC as soon as you can, even ahead of the property being sold, so you have time to report and pay the Capital Gains Tax liability.
If you would like any help with tax advice relating to Capital Gains Tax, or legal advice around a property sale, the accountancy and legal team at Optimum would be happy to help. Please get in touch and we would be happy to give you a quote.
We work with business owners, people and families, in Swindon, Wiltshire, Cheltenham, Gloucestershire and the surrounding area.