Tax Consultant Carter Backer Winter
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CGT on homes: Get the details right

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The capital gains tax relief on disposal of the taxpayer’s principle private residence (PRR) is the most valuable personal tax relief costing the exchequer £26.7bn per year. Reshma Johar provides an overview of the rules.

30th Oct 2020
Tax Consultant Carter Backer Winter
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When a client disposes of a residential property, the starting place for most tax advisers is to create a timeline of the period of ownership and to understand the nature of occupation and use of the property. As part of the initial conversations the tax adviser will need to obtain an understanding of other linked buildings, garden and grounds which also need to be considered for CGT purposes. The nature of these enquiries will be to establish what periods of ownership could benefit from the available reliefs.

From 6 April 2020, individual UK residents need to report disposals of UK residential property to HMRC within 30 days of completion as well as settle any tax due at that time.

There are exceptions to this, a report is not required where there is no charge to CGT, for example; the entire gain is covered by PRR, or the gain is within the annual exempt amount, or the transfer is between a spouse or civil partner.

Non-UK resident individuals have been required to report under the non-residence CGT (NRCGT) regime for disposals from 6 April 2015, but now they must report using the same mechanism as UK residents.

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Replies (2)

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By Bill H
02nd Nov 2020 11:14

As the more favourable lettings relief has gone after 5th April 2020 can the three year absence be taken into the equation when the property was let? If my client let it for say four years pre 2020 as long as they return to it before they sell it can I add the three years absence to my private residence period?

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By asquithandco
07th Dec 2020 13:46

Not really relevant, but it took me 20 mins to do the CGT computation and nearly two bitty and frustrating hours to set up the necessary access, including guiding the client through there side of things, to make the declaration!

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