NEWS

Missed online CGT Property returns must be filed

August 5, 2022
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BA ACA, Audit Partner
West London



Missed online CGT Property returns must be filed



NEWS

Missed online CGT Property returns must be filed

Image


BA ACA, Audit Partner
West London


HMRC has clarified that, with one exception, a CGT property return must be filed even if the disposal has already been reported on a self assessment return.

The government introduced the requirement for individuals to report disposals of UK residential property and pay the capital gains tax (CGT) arising within 60 (previously 30) days of completion on 6 April 2020.

There are different requirements for non-resident individuals which are not covered here. In addition, Companies, whether UK resident or not, are subject to corporation tax and there is requirement to file a CGT property return although all disposals must be reported on a corporation tax return.

For UK resident individuals who disposed of property there have been many occasions where these transactions should have been reported on a CGT property (PPD) return but this was not identified until the 2020/21 self-assessment (SA) returns were being prepared. It is not possible to file a CGT PPD return online after a SA return has been filed.

HMRC had previously advised that the CGT PPD return should be filed before the relevant SA return. In the interests of meeting the SA filing deadline (and given the difficulties with the CGT PPD system), many taxpayers and agents filed the SA return without first having filed the CGT PPD return.

HMRC have reached the decision that, where the SA return has already been filed, the CGT PPD return must still be filed, but on a paper return.  This is on the basis that it would have been inequitable to excuse some taxpayers from the filing requirement or not to charge penalties when they have been charged to others who filed late.

The one exception to the requirement to file a CGT PPD return is where the SA return is filed within 60 days (or 30 days as applicable) of the transaction completing. In this situation, the legislation is written so that a separate CGT PPD return is not required.

You should take steps to file outstanding CGT PPD returns on paper as soon as possible. Where a 64-8 agent authorisation is held, HMRC should issue a paper CGT PPD form to report a disposal of UK residential property to the agent on request when they phone the agent dedicated line.

HMRC will charge penalties and interest. In most cases, the taxpayer will have paid the relevant tax for a disposal in 2020/21 by 31 January 2022. Interest would have stopped running when the payment was made. The professional bodies have asked that late filing penalties should take into account the six-month delay in HMRC making the decision on how the returns should be filed.

Contact your Barnes Roffe client partner if you are considering a property disposal to make sure that you consider tax planning considerations and so that the HMRC tax compliance is dealt with appropriately.

 

 

 

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PLEASE NOTE: By the very nature of this type of information the details of tax law might have changed since they were published, so contact your Barnes Roffe partner before acting on any matter contained in these documents.