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December 2, 2021
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HMRC Extend Deadline for Capital Gains Tax Property Returns

The autumn budget was presented by the Chancellor of the Exchequer on Wednesday 27 October 2021, where for the most part few changes to the tax rules in the UK were announced.

However, it was acknowledged in the budget that changes would be made to the Capital Gains Tax (CGT) Payment for Property Disposals (PPD) service rules.

For further details on what the CGT PPD service rules are and whether they may apply to you, please consult our previous blog which provides details of this service.

PPD Service Deadlines

Previously, the government introduced new reporting requirements for UK residents disposing of residential property on or after 6 April 2020, where it was established that the deadline for taxpayers to report the disposal of UK residential property is within 30 days of completion where a capital gains tax (CGT) charge arises.

Further to this, the payment of the estimated tax liability is also due within 30 days of the completion date of the property, where taxpayers are expected to calculate the estimated capital gains tax arising from the sale of the property.

PPD service users reported that they were struggling to submit precise and reliable estimates for their CGT liability in the 30-day timeframe, as well as providing feedback that this period of time was insufficient for taxpayers to consult with their professional advisers where they had any issues with the calculations of the capital gains.

As a result of the above, HMRC extended the time period to 60 days instead of 30 days, where this was imposed with immediate effect from the date of the autumn budget.

In light of the above, whether the completion date of the sale of a property is before or after 27 October 2021 (i.e. the date of the autumn budget) may impact the amount of time a taxpayer has to file and pay their capital gains tax liability:

  • If the completion date for the sale of the property is on or after 27 October 2021, taxpayers and their agents have 60 days from the property’s completion date of sale to report and pay any capital gains tax due.
  • Alternatively, if the date of the completion of the sale is before 27 October 2021, the original 30-day limit for taxpayers to report and pay any capital gains tax due is still applicable.

Properties with Multiple Uses

The introduction of the PPD services rules has caused some confusion among users on how to report any capital gain arising in relation to UK properties that are used for both residential and non-residential purposes, e.g. a property with a pub downstairs and a flat upstairs.

HMRC have offered recent guidance on this point, where they have confirmed that only the part of the capital gain that is attributable to the residential use of a property is to be reported and paid via PPD. Therefore, the portion relating to the non-residential use of the property being disposed of can be ignored for these reporting purposes.

The calculation of taxable capital gains on residential properties are complex issues. Therefore, if you are unsure about this or would like further guidance on how to use the CGT on UK property service, please do not hesitate to get in contact with a member of the team for expert tax advice.

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