x
By using this website, you agree to our use of cookies to enhance your experience.
award
award award
award award

TODAY'S OTHER NEWS

Capital Gains Tax changes: owners advised to seek financial advice

A tax expert is urging owners of second homes, as well as property investors and existing landlords, to seek independent financial advice if they are considering selling their home - particularly if they anticipate the sale process going beyond April 6 next year.

On that data the Capital Gains Tax rules change, obliging owners of additional homes who have a CGT liability to pay up sooner than before.

Richard Mathews - chief executive of tax and legal consultancy Optimum Professional Services - has written on the website Businessbiscuit that currently UK residents have until the January 31 after the end of the tax year in which the capital gain is measured. 

So in some circumstances in the past, an individual could keep the tax on the capital gain for as long as 21 months before it had to be paid to HM Revenue & Customs.

But from next spring the rules change and anyone selling a property where CGT is due will need to settle this within 30 days of the completion of the sale. 

“This could create cashflow difficulties in getting the funds to be able to pay the tax in such a short time” warns Mathews, who says the failure to pay would probably result in HMRC charging interest and penalties.

And he reminds owners of additional homes that legitimate costs - including estate agents’ fees - can be deducted from the eventual CGT payment. Stamp Duty, improvement costs and legal fees are also likely to be deductable.

Likewise if you have accounts indicating that you suffered losses during your ownership of the property - that is, on your letting of it as a holiday home or buy to let - these sums can be offset against CGT liability.

“Clearly, the issue of Capital Gains Tax on second homes is not straightforward” he says. 

“Any landlords, second homeowners or property investors thinking of selling within the next 12 months should take specific advice to determine the ‘tax cost’ of selling before or after April 6 2020.”

icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up