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CGT: New HMRC guidance on property reporting

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HMRC has finally published significant guidance on using the UK Property Reporting Service for CGT and the new rules for the 60-day reporting deadline. Helen Thornley picks out some highlights.   

25th Jan 2022
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The UK Property Reporting Service was launched on 6 April 2020 as the route to report and pay tax on qualifying disposals of UK property. Until recently, the only user guidance has been that on the GOV.UK pages, but HMRC has recently published more detailed guidance as an appendix to its CGT manual.

The new guidance gives an overview of who needs to use the service, more detailed instructions on how to file online, and some details of the interaction between the UK Property Reporting Service and 2020/21 self-assessment tax returns.

These new manual pages replace the FAQ and workaround documents which HMRC issued last year as interim measure following pressure from the professional bodies. This latest guidance has been developed by HMRC over recent months with input from the ATT and other professional bodies.

The 20-month delay between the introduction of the reporting and payment policy in April 2020 and the arrival of detailed guidance is clearly unsatisfactory – and this point has been made repeatedly to HMRC. While the actual process of engaging with HMRC on the drafting was largely positive, the ATT feel that lessons must be learned so that taxpayers and agents are not left without proper guidance for such a long period.

UK residents

The guidance primarily focuses on UK residents who have, since 6 April 2020, been required to report disposals of UK residential property where CGT is payable. It aims to cover both practicalities such as when paper returns are possible (1.13), how to appoint or remove an agent (1.21) and how to make a payment (1.7) as well as more technical aspects, such as when estimates can be updated (2.5.6) and specific scenarios such as dealing with mixed use properties or multiple acquisition dates (2.6.3-4).

Most experienced agents will find the guidance on calculating a gain at part 2.2 irrelevant, but figures from the OTS’s second report on CGT suggest that in the first nine months of the UK Property  Reporting service, only 40% of returns were filed by agents, so if unrepresented taxpayers do find this guidance, this section will be relevant to them. The ATT and HMRC are currently discussing the best way to promote the existence of this new guidance so that everyone who needs it can find it.

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Replies (18)

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By Hugo Fair
25th Jan 2022 17:52

"only 40% of returns were filed by agents, so if unrepresented taxpayers do find this guidance, this section will be relevant to them."

Agree - but if the Appendix 18 page is the first thing an unrepresented taxpayer encounters, then many will just head for the hills. Don't get me wrong, the info here is what should have been published at the start - but the sheer volume will repulse all bar a dedicated reader and/or someone with reasonable experience who needs to check a particular point.

For once GOV.UK could come to the rescue ... delivering what it does (an introductory Noddy guide to a topic) - in this case allowing people to consider whether PPRR will apply etc, before providing what is usually sorely missing (links to the detailed guidance - and even relevant legislation if someone out there's feeling generous)!

Thanks (4)
Tim Good profile image
By Tim Good
25th Jan 2022 21:43

The advice at para 2.6.5 of the guidance is interesting ...

Thanks (2)
Replying to Tim Good:
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By Hugo Fair
25th Jan 2022 23:50

Well spotted ... and an excellent example of where the unrepresented (if mainly reliant on software as per HMRC's "vision") will come a cropper.

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Replying to Tim Good:
Head of woman
By Rebecca Cave
26th Jan 2022 09:39

!!! How is anyone supposed to understand that para about top slicing relief??

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By Ian McTernan CTA
26th Jan 2022 10:59

the taxpayer or agent needs to ring HMRC to arrange either a manual transfer of the excess to the self-assessment record, or a refund.

What an absolute joke. Only HMRC could be this bad, that two parts of their system cannot talk to each other and get to the right figure.

Why haven't our Institutes thrown up a stink about this?

Thanks (4)
Replying to Ian McTernan CTA:
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By Mike Aldridge
26th Jan 2022 17:02

Agreed. Also consider that phoning HMRC may be a joke as well, with long wait times on many occasions, listening to inane 'music'. Writing would not be a reasonable option, as they often take more than 30 days to reply despite published service level targets. Meanwhile, the client has money tied up with HMRC. Will they pay interest on the delayed refund/offset? I don't think so.

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Replying to Mike Aldridge:
Morph
By kevinringer
26th Jan 2022 17:52

Written reply within 30 days? I wish that was the case. Currently taking several months to process CGT declarations. I've just checked a few of their backlogs: today they're currently processing paper P87 claims submitted 28 May 2021. That's an 8 month delay.

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Replying to Ian McTernan CTA:
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By Seadog
26th Jan 2022 22:15

Hello Ian. Just to make matters worse Self Assessment software rounds the tax due differently to the on-line process by pence and this forces an Exclusion 130 under SA resulting in a paper filing excluded tax return being necessary. Got to love Making Tax Digital .

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Replying to Seadog:
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By Wanderer
27th Jan 2022 10:45

I just fudge the SA return to avoid this issue.

Can't be doing with:-
i) waiting for HMRC to process paper SA returns, then,
ii) when they do they issue penalties even though you've fully complied with their guidelines which should present this from happening, &
iii) so you take further months putting in further appeals to get the penalties cancelled.

& that's before getting them to refund any overpaid CGT which again doesn't fit 'the system'.

Also with other on line filing exclusion cases they often just process the return without making the necessary adjustments, so you then take further months getting them to correct their mistakes.

Fudging is the future!

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By tonyaustin
26th Jan 2022 12:37

Only 40% filed by agents but, given the agent has to obtain separate authorisation and the taxpayer needs a CGT on UK property account, I wonder how many were filed by taxpayers using details supplied by agents to cut down on the extra admin.?

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Replying to tonyaustin:
By kenny achampong
27th Jan 2022 10:16

I did exactly that. I have filed quite a few in the past, but HMRC have changed things again. I can't remember what it was, but it just seemed a lot easier to get my client to log in and I told him what figures to enter over the phone.

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Morph
By kevinringer
26th Jan 2022 13:17

This regime started 2 years ago. Shouldn't a forward thinking tax authority have published the guidance in advance and not 2 years after the horse has bolted?

Thanks (5)
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By tedbuck
27th Jan 2022 10:49

Regrettably I don't think that 'forward thinking' is a phrase that can be applied to HMRC nor, probably, to HMG who seem to do things without considering the consequences. I think that in the Treasury there must be a significant collection of Civil Servants, ex university no doubt, whose view is that anyone who strives for success must be penalised with tax to pay for those who can't be bothered to do anything to help themselves. Certainly their war on property owners would suggest this as there is really little justification for their actions in the real world where many people treat property as provision for their old age as nothing else offers a return on cash other than stocks and shares which have their own risk problems.
I suppose the real problem is HMG raising money to pay for too many Civil Servants to run around in ever decreasing circles creating more bureaucracy to waste more of peoples time and generally reduce productivity throughout the business world - and, of course create an income stream for HMG through fines. MTD, GDPR and so on. Be a lot better if HMRC trained staff to make the existing system work rather than relying on computer systems which don't talk to each other instead. And as for WFH for HMRC staff - can you imagine anything more crass - best get the GDPR police in on that one - I cannot believe, with their level of efficiency, that the rules are not being breached. But don't I remember that the Data Protection people were one of the first to break the rules???
Talk about lunatics in charge of the madhouse!

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By Nebs
28th Jan 2022 10:39

It looks like HMRC are taking the "Customer Experience" problem seriously, as their situations vacant shows......

HMRC Independent Advisor, Customer Experience Committee
HM Revenue and Customs
Apply before 11:55 am on Monday 21st February 2022
Reference number 181118
Salary £3,000
This post will attract a remuneration of £3,000 per annum for approximately 4 days a year.

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Replying to Nebs:
Morph
By kevinringer
28th Jan 2022 11:42

£3000 for 4 days work! Where do I sign up?

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Replying to kevinringer:
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By Hugo Fair
28th Jan 2022 14:23

Slow down ... this is HMRC where:
* 'remuneration' presumably means it will be treated as PAYE (taxed at source with no guarantee of them getting calcs correct); and
* 'approximately 4 days a year' can have a tendency, a bit like other weasel phrases, to evolve into taking say 8 days of your time.
Still interested?

Thanks (1)
Replying to Hugo Fair:
paddle steamer
By DJKL
01st Feb 2022 23:30

Agreed, four days of meetings plus four days of reading/studying papers for said meetings.

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By TessaW
07th Feb 2022 08:39

I have just called HMRC to arrange for refunds of capital gains tax. The clients are a married couple in their mid 80's. I was advised that HMRC aim to repay the refunds within 13 weeks. Perhaps HMRC could amend the rule to say that the initial payment of CGT needs to be within 13 weeks of completion too.

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