Changes to Capital Gains Tax on second properties
New rules are being introduced in April 2020 requiring individuals disposing of an interest in residential property which gives rise to a Capital Gains Tax (CGT) liability to report such transactions to HMRC and pay the tax arising within 30 days.
Currently, where a CGT liability arises for UK residents on the sale of a residential property, the liability is declared through self-assessment tax returns and payable by 31 January following the tax year in which the gain arises.
The calculation of the amount payable will take into account an individual’s annual exemption and any unused losses that may be available. A “reasonable estimate” of the individual’s income for the year will need to be made in order to calculate the CGT liability due to the effect of income levels on the CGT rate to be applied.
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