The number of property investors and second home owners in the UK has increased significantly in the last decade.
However, this meteoric rise has resulted in a tightening of tax rules – and in particular a much shorter period for dealing with Capital Gains Tax returns.
30-day rule for CGT payments
Since April 2020, the date on which Capital Gains Tax (CGT) must be paid on gains arising on the sale of residential property has changed. Taxpayers now have only 30 days to file a CGT return and make an advance payment towards their tax bill where CGT is due.
This differs drastically from the previous rules, which allowed people to pay CGT on the disposal of a property up to 22 months after the sale as part of their self-assessment return.
Most people will not pay CGT on the sale of their main home thanks to tax relief, but some larger properties and second homes do. In particular, this shorter period for filing Capital Gains Tax returns, affects property investors and landlords.
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