Capital Gains Tax (CGT) 30-day reporting for residential real estate owned by trusts and estates

By Jo Hamilton, Tax Manager

Since 6 April 2020, the payment of the CGT due following the disposal of a residential property will need to be made within 30 days of the disposal. These tax payments made will be credited against the trusts CGT and income tax liability for the tax year when the Trust & Estate Tax Return is completed and submitted to HMRC.

At the same time as making the payment of the CGT, a special payment on account return will also be required setting out details of the disposal and tax liability. The calculations include the annual exemption and any brought forward losses available. Trust and estates are still required to report these disposals within their end of year tax returns.

Trustees and executors will be subject to penalties for non-compliance.

The date that a transaction is deemed to have completed for CGT purposes is generally the date of exchange. However the deadline for submission of the new returns and payment of the CGT on account is 30 days from the date of completion.

In order for an agent to submit the above mentioned CGT return, there are various steps to follow and these differ for trustees and executors. We would therefore advise that where trustees and executors are looking at disposing of a residential property, they seek the relevant tax advice in advance of completion to ensure that the 30 day deadline is met.

If you would like further information in respect of this matter, please do not hesitate to contact a member of the team.