Would this capital gain need to be reported?

Would this capital gain need to be reported?

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HMRC's guide to completing a tax return indicates to report a capital gain only in certain circumstances (e.g. proceeds and gain above given limits).

Where reporting is required, you must indicate where a valuation has been used.

So, what if your valuation is below the relevant limits (e.g. £10k for a minority shareholding)? Does that mean you need not report, in which case HMRC won't be given a chance to query the value used (what if they would think it's £15k)?

Replies (7)

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By johngroganjga
09th Feb 2015 12:14

What is the transaction that has occurred here, and why is a valuation relevant?

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By geroge
09th Feb 2015 12:22

Hi John, I have a client who has 99% ownership in a property letting company with the 1% held by his sister. The proposal is for the sister to gift her 1% to the client's daughter.

The properties are probably worth £1m-£1.5m, so depending what value and minority discount you use, the proceeds (=gain in this case) can end up above or below the £11k annual exemption.

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By johngroganjga
09th Feb 2015 12:39

Thank you. Yes I see the point of the question. What I would do is declare the transaction on the return regardless of whether the assumed sale proceeds were above or below £10,000. 

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By Portia Nina Levin
02nd May 2015 11:12

(No subject)

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By geroge
09th Feb 2015 12:52

Thanks John, I was interested to know if I had missed something in the guidance on when to complete the capital gains pages, but apparantly not.

The sister does not currently complete a self assessment (in which case it would be easy enough to just include it), so I'll set out the option to the sister. However, I am pretty confident she will opt not to register for self-assessment to voluntarily disclose (in our view)  a non taxable item, where there is no legal obligation to do so.

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By bernard michael
09th Feb 2015 15:27

Don't you have to declare the value on the Land Registry transfer document . If I'm right what price will you insert??

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By bernard michael
09th Feb 2015 15:55

Sorry - misread your post

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