There are some important changes happening from 6 April 2020 which can affect everyone who sells or gives away residential property after that date. Primarily you should be aware that unless the property was your main residence throughout the time you owned it, you will have to file a tax return with HMRC within 30 days of completion and may have to pay capital gains tax at that time : much earlier than has been the case until now.
To put this another way, if you have lived away from home for a time, have more than half a hectare of land, have a second home, or run a business from home you may be affected.
30 days is a short period of time in which to assemble all the information you will need and there will be penalties for late filing, so it is wise to ensure that you have the following details to hand:
- Date of acquisition, cost of purchase and other costs such as legal fees or stamp duty land tax.
- Dates in which you lived in the property
- Dates where you shared it with a lodger?
- Improvement expenses such as a new kitchen or extension (with invoices)
- Date and proceeds of sale. Costs of sale such as legal fees or agency fees.
There are detailed rules on the way in which the accelerated capital gains tax will interact with your usual annual tax return, and we will be happy to discuss your situation with you further.
Please come to talk to us as soon as you put a property on the market. You can speak to your usual Mercer & Hole partner or Lisa Spearman.