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HMRC to speed up capital gains tax payments for residential property sales

Peter Richardson

Payments on account required from April 2020. 

A payment on account of capital gains tax will need to be made when a residential property is sold from April 2020. 

Payment will be due within 30 days of completion and the seller will have to submit a 'payment on account' return at the same time. 

The changes affect those selling a second home or rental property. They will not apply to disposals covered by only or main residence relief. However, if only some of the gain is covered, a payment on account and return will need to be made for the taxable part. 

The changes also apply to overseas property sales, so a payent on account will need to be calculated when a UK resident sells a residential property abroad, that is unless the gain on the disposal will also be taxed in that country and double taxation relief is available or the gain would be taxed on the remittance basis. 

HMRC has published a consultation on how the amount payable will be calculated, the administration of those payments and changes to the current payment on account system for non residents who sell UK residential property. 

Responses should be emailed by 6 June.