Just a quick reminder that from 6th April 2020 the payment window for Capital Gains Tax or CGT on Rental Domestic Properties, Second Homes and Overseas Houses and Flats will drastically shorten. As specialised Hackney accountants, we’ve gathered the following.
As of now gains are declared on the self-assessment tax return and paid the following January.
From 6th April 2020 CGT must be paid within 30 days of completion. This will mean, apart from the effect on cash flow, that a return will have to be submitted for every property sold. No return will be necessary if no tax is due.
Micro Entrepreneurs Relief
This came into effect on 6th April 2017 and is an exempt allowance of £1,000 against trading income.
For example, if John earns £1,000 on a side-line with little or no expenses (less than £1,000) he can claim expense of £1,000 making no profit.
If the gross receipts are in excess of £1,000 the he can claim Partial relief. Again, for example, If he earns £2,500 with say £500 expenses he would have an actual profit of £2,000.
However, if using Entrepreneurs relief, he can claim Partial Relief of £1,000 giving him a taxable profit £1,500.
Need more information or looking to get help from your local hackney accountants? Get in touch with us and we’ll be glad to assist.