What does section 59AZA of the Taxes Management Act 1970 do?

Section 59AZA is a signpost provision that directs readers to Schedule 2 of the Finance Act 2019. It does not contain standalone rules itself but instead identifies Schedule 2 as the source of the requirements for making advance payments on account of capital gains tax arising from disposals of UK land and property.

How do payments on account of capital gains tax work for UK property disposals?

When a person disposes of UK residential property, they must report the disposal and make a payment on account of capital gains tax within 60 days of completion. This payment is later credited against the individual's final self-assessment liability for the tax year, with any underpayment or overpayment reconciled through the self-assessment return.

Which disposals trigger the payment on account requirement under Schedule 2 of the Finance Act 2019?

The requirement applies to disposals of UK residential property by UK residents and disposals of any UK land by non-UK residents. These disposals give rise to capital gains tax liabilities that must be paid on account within the specified period, rather than being deferred to the normal 31 January self-assessment payment deadline.

What happens if the payment on account differs from the final capital gains tax liability?

The payment on account made within 60 days of completion is credited against the taxpayer's overall capital gains tax liability on their self-assessment return. If the final liability is higher than the amount paid on account, the balance is due by 31 January following the tax year. If the taxpayer has overpaid, they receive a refund.

Taxes Management Act 1970 section 59AZA

Payments on account of capital gains tax: disposals of land etc.

Section 59AZA directs readers to the provisions in the Finance Act 2019 that require advance payments on account of capital gains tax when UK land or property is disposed of.

This section does not contain standalone rules but instead points to Schedule 2 of the Finance Act 2019 as the source of the payment-on-account requirements.
The requirements apply to disposals of UK land and certain related assets that give rise to capital gains tax liabilities.
Under the Schedule 2 rules, a payment on account of the capital gains tax due must be made within a specified period after completion of the disposal, rather than waiting until the normal self-assessment payment date.
The provision was inserted into the Taxes Management Act 1970 by Schedule 2, paragraph 25(10) of the Finance Act 2019.

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