HMRC has published the conclusions of their research into how best to communicate the introduction of a 30 day payment window for CGT on UK residential property from April 2020.

Currently capital gains tax (CGT) is payable by UK residents by 31 January following the tax year of disposal. From April 2020 this will reduce to 30 days from the date of completion for residential property. In practice the change will apply to any property not benefitting from private residence relief , such as holiday homes and rental properties.

In order to avoid a repeat of the situation with non-resident capital gains tax  where there have been dozens of late filing penalty cases, many of them overturned at tribunal, HMRC have undertaken research into how best to communicate the change and have now published the results.

  • Taxpayers prefer to be advised of such changes as early as possible to help them plan especially where lengthy transactions such as property sales are involved.
  • Landlords have an expectation that tax changes which affect them will be directly communicated to them by HMRC by letter or email as HMRC are aware that they own property from their tax returns. Letters were preferred due to the prevalence of scam emails.
  • Taxpayers trust and would use this initially to understand their CGT obligations with further online research often including watching YouTube videos. They would expect changes such as this to feature on the home page but would also expect to be advised about changes from intermediaries such as accountants and estate agents.
  • Taxpayers did not understood the information given to them by HMRC about the change and were confused about the terminology used.

This shows that taxpayers expect a proactive and tailored approach from HMRC to inform them about changes which may affect them and require information to be provided using clear and familiar language.

Amongst those surveyed there was a greater reliance on accountants and tax advisers by those dealing with one-off property sales than with multiple property owners such as landlords who were more likely to do their own research and seek professional assistance for confirmation of understanding and calculation of amounts due.

Links to our guides:

Capital gains tax rates and allowances

Non-resident CGT UK property

PRR: Private Residence Relief

External link:

Capital Gains tax communications research