CGT: New HMRC guidance on property reportingby
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.
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.
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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Helen Thornley has a focus on personal and capital taxes. Initially training as an accountant before moving to tax, she worked in practice until her appointment as a technical officer in 2017. She also has an interest in the history of tax.