The Government has introduced new reporting requirements for UK residents who dispose of residential property on or after April 6, 2020.

If there is any capital gains tax (CGT) due, it must be reported and paid within 30 days of the completion of the sale using HMRC's online reporting system.

If no CGT is due on the sale because any capital gain is completely covered by the main residence relief for CGT (where the sale is of a person's main or only home) or it is an inter-spouse transfer, there is no 30-day requirement to report.

However, in most other cases it is necessary to report the disposal of a residential property in the UK within 30 days if there is a potential liability to CGT because of that disposal, even if no tax is actually due. This includes a situation where the gain is covered by the annual exemption, or where the gain is offset against capital losses.

Taxpayers who file an annual self-assessment return must also include details of the gain on their annual return.

What does the future hold?

The Office of Tax Simplification recommended abolishing the CGT-free uplift on death in November 2020. The removal of this tax-free rebasing could mean that both inheritance tax and CGT become payable on the same assets and as a result of the same event (death of the owner).

More information will be needed to show how this would be calculated in practice, however there have been suggestions that the removal of the uplift would encourage people to give away more of their assets during their lifetime, rather than retaining assets that are then inherited on the owner's death.

No changes have been announced, but as the pandemic has left a large hole in the public finances, tax rises are to be expected, and CGT is seen as an area that may be targeted.