The Government is to raise £1.2bn by reducing the payment window for capital gains tax on residential property.
CGT on residential property is currently paid between 10 and 22 months after a property is sold.
In today’s Autumn Statement Chancellor George Osborne announced that from April 2019, CGT must be paid within 30 days of a completed sale.
The Government says the current payment window is out of step with the position for other taxpayers, such as those paying income tax through the Pay As You Earn system.
It says: “The delay can also cause problems where a taxpayer forgets to pay, or where they no longer have enough of the proceeds from the disposal to cover the tax charge.”
It will be introduced in 2019 to coincide with the introduction of digital HM Revenue & Customs systems.
The Government expects the change to raise £930m in 2019/20 and £230m in 2020/21.
London accountancy firm Blick Rothenberg says the change is likely to increase sale costs by at least £750 per property.
Tax partner Frank Nash says: “I suspect that property conveyancers will have to deduct capital gains tax and file a tax return on behalf of the vendor.”