The long-awaited detailed HMRC guidance on capital gains tax (CGT) on disposals of UK residential property has been published as an appendix to the CGT manual.
This guidance comes in three parts:
- Accessing the CGT on UK property account
- Submitting returns through the CGT on UK property account
- Interaction with self assessment (this part not yet published, expected very early in January 2022).
The Tax Faculty has suggested the guidance might be expanded to cover the related penalties for late submission and payment.
- HMRC answers questions on CGT on UK residential property
- TAXguide 15/20: CGT UK property disposal reporting
- Offsetting overpaid CGT against income tax
- The service has not yet been updated to reflect the change announced at Autumn Budget 2021 to extend the deadline for reporting and payment from 30 days to 60 days. ICAEW understands this work is in hand but is not aware of the timing for implementation.
- HMRC incorrectly issued 6 and 12-month late filing penalties for 2020/21 to a very small number of taxpayers who reported CGT on a disposal of a UK property. This error has now been corrected and the penalties cancelled. HMRC will be writing to all affected taxpayers to notify them of this error and reassure them that the incorrect penalty has been cancelled. Where the penalty has already been paid, HMRC is arranging refunds: in some cases, taxpayers will be asked to supply bank details to facilitate the refund.
- ICAEW is concerned that the digital service is not accessible to many that need to use it, with the result that significant numbers of CGT returns are being filed on paper. Discussions with HMRC continue but improvements are unlikely in the foreseeable future.
- As of the beginning of December 2021, HMRC was processing paper returns from October 2021, although a small number of older cases with amendments or additional returns are outstanding for longer. Where a paper return is filed payment is due 30 days from the date of the HMRC demand (this has been increased from 15 days).
- ICAEW and other professional bodies are continuing to engage with HMRC on what might be done to raise awareness of the requirements which continues to be poor.
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
More from the Tax Faculty
Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter
Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.
Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.