News

With house sales soaring following the cut in Stamp Duty Land Tax (SDLT), more and more people are falling into a potential tax trap.

Not understanding the tax requirements on the profits made when selling a house could leave you open to receiving a penalty from HMRC.

Owners of UK residential properties are required to report and pay any Capital Gains Tax (CGT) on the sale of a residential property within 30 days of completion and penalties are being strictly applied by HMRC for non-compliance.

Sue Jeffrey, Tax Partner at David Allen said: “More and more often, I am speaking to clients who are unaware of the requirement to pay Capital Gains Tax but especially the new 30-day deadline for making the payment which was introduced on 6 April 2020”.

“It can be a complex area to understand but there are ways to ensure that you stay compliant.  It is also often possible to plan for a future disposal and minimise the amount of Capital Gains Tax you may have to pay.

“The last thing you want is to be faced with a penalty charge further down the line just because you were not aware of your requirement to report and pay tax on the profits made.”

With the SDLT rules changing again on 30 June 2021 many purchasers will be pushing to complete before then.  This will undoubtedly give rise to more sellers wondering about their tax reporting requirements.

If you are unsure whether or not CGT applies to you, or you need some advice to ensure you stay compliant, please get in touch with a member of our tax team.