CGT late. Best plan of action?

Expected to file CGT via SA for sale June23. Have now read we should have filed CGT within 60 days!

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A former residence which we kept and rented out. Property bought in 2006. Rented from 2013 and sold June 1st 2023. Have always submitted SA each year with rental income etc. Believed CGT would be declared within 23/24 SA now that tax year has ended. Whilst prepping this I've come across the legislation stating it must be declared within 60 days of completion and all the various levels of penalties.

At no point were we advised by solicitors of the 60 day deadline and would have happily paid it early if we believed we could. 

From other Q&As on here I've just read, there seems to be two options...1. File the CGT and incur penalty...perhaps appeal the penalty based on ignorance (seems like some had success).  Or 2. just file it though SA as we were planning to make our payment and see what happens.  Any thoughts? 

 

In addition to this, I was hoping to offset some of CGTL with a Lease extension which took place in 2011 before we rented the property but at a cost of £10k which would have increased the value of the property. In order to claim this offset, am I right this can only be done through the CGT filing and not the SA?

Thanks. 

Replies (10)

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By David Ex
10th May 2024 00:47

paularton wrote:

Best plan of action?

Appoint an accountant.

https://find.icaew.com/

Other professional bodies are available.

https://www.accountingweb.co.uk/any-answers/how-to-use-any-answers

“If you intend to plan a course of action based on what you read in here, you should instead be taking professional advice.”

“They are not here to provide free accounting advice.”

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By HL86
10th May 2024 07:31

Instruct an accountant. A Search in Google for UK Landlord tax accountants will suffice to begin with!

Solicitors do not have an obligations nor the qualification to advise on tax matters

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By Justin Bryant
10th May 2024 08:52

Basil here thinks option 2 will land you in prison or worse, but that seems to be a minority of 1 view here (a tax adviser should not advise you to do that of course).

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Replying to Justin Bryant:
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By More unearned luck
10th May 2024 11:03

I agree with Baz to the extent that it is a bad option because there could then be no RE defence to the LFPs. The RE of ignorance of the law will fail, if it would otherwise have succeeded, because the default wasn't corrected within a reasonable time of enlightenment.

It is not rocket science for HMRC to data mine their system for a list of returns that contain a residential property gain on which tax arises and there being no sum in the tax paid on account box.

Also HMRC get sale data from the land registry and where the property address wasn't the vendor's home address and where no CGT Return has been made HMRC will write to the vendor.

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Replying to More unearned luck:
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By Justin Bryant
10th May 2024 14:00

I'm just really saying that (assuming there is no professional adviser involved) you pays your money and you takes your choice (probably without the risk of prison or worse).

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By Retrocanary
10th May 2024 09:39

Still baffles me how solicitors can't seem to include a line in an e-mail, letter or on any number of bits of paper they produce about the need to consider Capital Gains Tax and to consult a tax adviser if applicable. Vast majority of people completely unaware of this rule. No surprise it even slips past the Deputy Leader of the Labour party.

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By rmillaree
10th May 2024 09:40

At no point were we advised by solicitors of the 60 day deadline and would have happily paid it early if we believed we could.

this sums up the stupdity of the system - when they brought this in then only sensible option was for solicitors to be forced as best practice to get signed confirmation from seller that they are aware of the cgt rules and that if cgt is due it will likely need reportingg an paying in 60 days.

sums up solicitors that between themselves they cant do the obvious right thing here !

however much us accountants flag up i advance facts are people are busy and wonmt remember and need slap in the face witha wet fish at time of sale - sigh

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Replying to rmillaree:
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By David Ex
10th May 2024 11:13

rmillaree wrote:

however much us accountants flag up i advance facts are people are busy and wonmt remember and need slap in the face witha wet fish at time of sale - sigh

It’s not clear whether the OP had engaged an accountant to deal with the rental income over the years. If so, it’s possible income tax wasn’t dealt with correctly, to add insult to injury.

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stonks
By WinterDragon
10th May 2024 11:31

I'm normally all for the punter taking a fair crack when possible. I'd have said no harm no foul for trying your best to get it right but the last question demonstrates you need professional advice as others have mentioned.

If I remember correctly, you would need to file a paper CGT return if you have already submitted your self-assessment that includes the gain.

When you submit the CGT return late you will almost certainly have a penalty raised. You might have grounds for appeal. "Ignorance is no defence" doesn't apply here if you can prove you took steps to ensure you were compliant and the error was non-deliberate and not careless.

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stonks
By WinterDragon
10th May 2024 11:31

I'm normally all for the punter taking a fair crack when possible. I'd have said no harm no foul for trying your best to get it right but the last question demonstrates you need professional advice as others have mentioned.

If I remember correctly, you would need to file a paper CGT return if you have already submitted your self-assessment that includes the gain.

When you submit the CGT return late you will almost certainly have a penalty raised. You might have grounds for appeal. "Ignorance is no defence" doesn't apply here if you can prove you took steps to ensure you were compliant and the error was non-deliberate and not careless.

Thanks (0)