New Requirements For CGT Property Returns

HMRC have clarified that, where a self-assessment (SA) return has already been filed, the Capital Gains Tax (CGT) PPD return must still be filed, but on a paper return. Capital Gains Tax refers to a tax on the profit generated when selling an asset that has increased in value since initial purchase.

The government, in April 2020, mandated reports of disposal, i.e. selling, of UK residential property, as well as the payment of Capital Gains Tax arising within 60 days of completion; this period was previously 30 days. Non residents are required to report the disposal of a wider variation of assets even in the situations where there is no capital gain.

This recently imposed policy, regarding the requirement of a paper return, has been introduced as a result of the problems arising with regards to the many transactions, which should have been reported in CGT property returns prior to self-assessment (SA), only being identified when the 2020/21 SA returns were being prepared. As it is not possible to file a CGT PPD return online after a SA return has been filed, a solution to this problem was sought.

The one exception to the explained requirement is where the SA return is filed within 60 days (or 30 days as applicable) of the transaction’s completion. In this case, a separate CGT PPD return is not required.

HMRC will charge penalties and interest. Therefore, in order to avoid such sanctions, agents and taxpayers should act quickly and file any outstanding CGT PPD returns on paper as soon as possible. Where a 64-8 authorisation is held, the agent must phone HMRC’s agent dedicated line and request a paper CGT PPD form to report the disposal of UK residential property, and this will then be issued.

In the majority of cases, the taxpayer will have paid the appropriate Capital Gains Tax in 2020/21 by 31st January 2022. Interest would have stopped running when the payment was made. Professional bodies have suggested that penalties for late filings should account for the six-month delay in HMRC’s decision regarding the way in which returns should be filed.

The Tax Faculty have requested that HMRC make the form accessible on http://gov.uk rather than by request to the helpline. HMRC are yet to respond.

If you want further general advice, please don’t hesitate to contact us via telephone on 02476017778 or email info@cheylesmore.com!

Cheylesmore Limited T/A Cheylesmore Accountants accepts no liability for actions taken in reliance upon the information given, and it is recommended that appropriate professional advice be taken.