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5% surcharge on CGT

Is the 5% surcharge on late CGT payable if subsequently rolled over?

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I have a client that made a large capital gain in 2015/16 (tax of ~£100k), which is due for payment on 31 January 2017. 

We have discussed reinvesting the gain in EIS investments to roll the gain over (the EIS and IHT benefits make up for the risk), however, it is likely that the EIS investments themselves (and EIS3) will not be available until March/April. 

The question is whether the client needs to pay the CGT and then reclaim it, or can they hold off of paying the tax. We appreciate that the interest will be charged, then reduced to nil if no tax is due. Does the same apply to the 5% surcharge if the tax is outstanding on 28 Feb?

Any help would be appreciated. 

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By michaelblake
24th Jan 2017 17:25

He can make a provisional rollover relief claim which avoids paying any tax

https://www.gov.uk/business-asset-rollover-relief

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By lordbase
24th Jan 2017 19:05

Thanks Michael, looking at the claim for provisional relief, it's specifically for business asset rollover, rather than EIS deferral relief.

The asset disposed of was a residential property, so rollover relief couldn't apply, so I'm not sure that HMRC would accept an HS290.

Have you had any experience with this?

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By michaelblake
25th Jan 2017 21:49

Apologies I misread the question.The HS297 guide at the bottom of Page 5 suggests that you cannot make a claim until you have the EIS3 certificate. It seems irrational that CGT rollover allows a provisional claim and EIS deferral relief does not but then again looking for consistency in the application of tax administration , well .......

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