The CGT on the gain arising on the sale of a residential property is currently due by 31 January following the tax year in which the disposal occurs. For unconditional contracts the disposal date is the date of exchange.
From April 2019 taxpayers will be required to make a payment on account of any CGT due on the disposal of UK residential property within 30 days of the completion of the disposal. A payment on account will not be due on properties which are not liable to CGT because they qualify for principal private residence relief. Draft legislation will be published for consultation in 2016.
Those individuals relying on use of sale proceeds from the sale of a residential property that does not qualify for PPR, to fund a contemporaneous purchase of a second property may need to consider alternative means to fund the CGT liability.
It is not clear at this stage how the new changes will be administered. The compliance burden may rest on the conveyancer, who may need to deduct CGT and file a tax return on the vendor’s behalf. No doubt the result will be higher sale expenses.