CGT 30-day returns can now be amended
15 October 2020: Returns of capital gains tax (CGT) on disposals of UK residential property can now be amended. ICAEW’s Tax Faculty updates its guidance and clarifies reporting on behalf of estates.
A new requirement for UK residents to report and pay CGT on disposals of UK residential property within 30 days was introduced in April 2020. TAXguide 15/20 which explains how the digital service operates has been updated.
On 14 October 2020, HMRC released functionality which allows returns to be updated online. Until this functionality was released, returns could only be amended by phoning or writing to HMRC.
The Tax Faculty has also obtained the following clarifications in respect of reporting disposals made by estates.
- Executors and personal representatives cannot appoint an agent for this service. It is not possible to complete the ‘digital handshake’ required to appoint an agent and there is no alternative means to appoint an agent to act for an estate for this service. Where an agent is acting, they need to request and file a paper return.
- Executors and personal representatives can use the process outlined in the guidance to submit a return online, but they are not able to view a return, make amendments or obtain payment details online. The Tax Faculty understands that although filed online, the return is in fact processed manually by HMRC, who then writes to the personal representative with instructions on how to pay and grants an extended payment deadline.
- Where an executor or personal representative files a return online on behalf of an estate, they use their own unique taxpayer reference number (UTR) and CGT account and select the option to file on behalf of someone else. Where they file a paper return, they will also need to provide a UTR which the Tax Faculty understands can be that of either the deceased or the personal representative.
Great care will be needed to match payments, especially where returns are submitted for multiple estates using the same CGT account.
A complex estate will need to register and obtain a UTR using the trusts and estates registration service and can use that UTR when making a CGT return. This is not necessary for a non-complex estate that can use the informal procedure (explained in the estates section of the TAXguide) to finalise its tax affairs.
The Tax Faculty continues to receive reports of cases where the digital handshake to appoint an agent has not completed successfully. This will always be the case where a disposal is being made by an estate, but please contact firstname.lastname@example.org if you have other examples that can be shared with HMRC.