HMRC outlines changes to Capital Gains Tax treatment on second homes
From April 2020, the date at which Capital Gains Tax (CGT) must be paid on a second home property disposal is changing.
After this date, taxpayers will only have 30 days to file their return and make an advance payment towards their tax bill.
This differs drastically from the current rules, which allows people to pay CGT on the disposal of a property up to 22 months after the sale as part of the self-assessment cycle.
These changes have been known for some time, however, recent research by HM Revenue & Customs (HMRC) suggests that the level of awareness of the CGT changes remains low, with many taxpayers confused about the new rules.
In its report, HMRC said that both individuals and intermediaries, such as accountants, reviewing HMRC’s policy documents had found it “difficult to understand due to long paragraphs containing financial terminology and unfamiliar terms related to CGT”.
“As a result, neither audience felt confident that they had fully understood the policy changes and felt they would need to refer to a professional for clarification,” HMRC concluded.