The Office for Tax Simplification (OTS) has published a report recommending that the government should extend the deadline for the payment of Capital Gains Tax (CGT) from 30 to 60 days following disposal of a residential property.
The report noted that 30 days is an ambitious target for taxpayers, and that many only find out about their tax obligations after they have sold their property.
According to OTS, annually an average of 150,000 people report a disposal of residential property, 85,000 of which have a taxable gain to file.
The National Residential Landlords Association (NRLA) has voiced it support for the proposal to reform CGT rules.
Chris Norris, policy director for the National Residential Landlords Association, said: “Landlords should always ensure they meet all legally required deadlines to pay tax.
“That said, today’s report from the Office for Tax Simplification demonstrates a woeful lack of communication and consideration by HMRC about what is expected of those liable for the tax.
“It adds weight to the argument that the seemingly arbitrary, 30-day deadline has created more problems than it solves.
“We would support the OTS in recommending an extension to 60 days to avoid landlords missing a shorter deadline, potentially through no fault of their own.”
Paresh Raja, CEO of Market Financial Solutions, also welcomed the proposals.
He said: “It’s not surprising that a third of buy to let investors and other property sellers were missing the 30-day CGT deadline, which for many taxpayers is just too restricted.
“At a time when appetite among buyers remains strong, ongoing delays in the conveyancing process can make it a real challenge for many individuals to file on time through no fault of their own, particularly if they own several properties and we expect this proposed reform to be very well received by property investors.”