As ever, in the lead up to the Chancellor’s Autumn budget announcement, there was a flutter of chatter surrounding potential tax rate overhauls. Namely, to align the Capital Gains Tax rate with the Income Tax rates and significant changes to pension relief for higher rate taxpayers. Following the announcement, many were left perplexed with the Chancellor instead focusing on areas such as alcohol and domestic flights duties.
However, for tax practitioners and taxpayers who have property interests, the Chancellor did have some good news, an extension to the maddening 30-day Capital Gains Tax reporting deadline on disposals of interest in UK land.
The crucial difference being non-UK residents must report all disposals of UK property and land, even if there is no tax due. This unfortunately remains the case.
In summary, although it seems a straightforward change, professional bodies and practitioners alike have been campaigning for change since the introduction of 30-day reporting in April 2020.
The extension should reduce the level of dry tax charges, i.e. payment of tax without receipt of funds. With the 30-day deadline to report and pay the tax due, parties disposing of the properties could potentially have not received the funds from the purchasers by the time they had to pay the tax. 60 days clearly gives taxpayers, and practitioners, a more reasonable timescale to work by.
Although the actual reporting remains cumbersome, the extension to the deadline should ease some of the administration issues which had plagued the reporting to date.
The extension to 60-day reporting will benefit a wide range of individuals and should hopefully ease what can be a stressful process for all involved. Here’s hoping it can also lighten the load for HM Revenue & Customs, giving them room to tighten their own turnaround times.
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