Capital Gains Tax: Britons should note key deadline & changes for self-assessment reasons
Capital Gains Tax (CGT) must be paid on the profit when an individual sells something which has increased in value. The levy is to be paid on what is gained, rather than the amount of money a person receives. People will need to consider CGT when selling property which is not a main home, most personal possessions worth over £6,000, alongside shares and business assets.
These are known as ‘chargeable assets’ and must be checked by Britons to ensure the correct amount of tax is paid.
However, there is an important deadline relating to CGT which is occurring in just over a month’s time.
Individuals have until January 31, 2021 to declare profits made from selling a property which is not a person’s main home during the 2019/20 financial year.
This is also the deadline by which the CGT bill is due, and so is additionally important for Britons to settle up the amount owed.
READ MORE: Capital Gains Tax: Britons pay out millions – will levy rise in 2021?
But there are also important changes in this regard to note when it comes to a Capital Gains Tax payment.
In April 2020, the government made changes relating to how CGT is paid and how the levy must be declared.
As a result, those who are selling a property which is not their main home and who make a Capital Gain should use the online service to inform HMRC.
The government says the tax due must be paid within 30 days of completion.
Karl Khan, HMRC’s Interim Director General for Customer Services, commented on the changes.
He said: “The 2019 to 2020 tax year is the last year UK residents will be required to pay the Capital Gains Tax for the sale of properties as part of the Self-Assessment process.
“We want to make sure they are aware of the new requirements. We’re making it easier for customers to pay any tax that is owed.
“UK residents, including property developers and landlords, should now use the online service to make any Capital Gains Tax declarations immediately after selling a residential property.”
There has recently been speculation that rates for Capital Gains Tax may rise in 2021, however the Chancellor Rishi Sunak is still considering the issue.
A recent report commissioned by Mr Sunak and undertaken by the Office for Tax Simplification (OTS) suggested the Treasury could raise £14billion by bringing CGT rates in line with income tax.
The report additionally made recommendations of the current tax-free allowance for CGT, which currently stands at £12,300.
It suggested such an allowance could be reduced to between £2,000 and £4,000.
An implementation of such rules could mean significant change for how Britons deal with assets.
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