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Budget 2021: CGT reporting extended to 60 days

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The deadline to submit a capital gains tax return, and pay any CGT due, on a disposal of UK homes has been extended, with immediate effect, from 30 to 60 days.

28th Oct 2021
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For disposals of UK residential property completed on and after 6 April 2020 UK tax residents have had to report the gain to HMRC, and pay the CGT due, within 30 days of completion. Non-UK tax residents have been obliged to report any disposals of any UK property or land (residential or commercial) and pay any CGT due within the same time limits.

The Autumn Budget has changed that. For disposals that complete on or after 27 October 2021 the reporting and payment deadline will be 60 days after the completion date. Relevant disposals that completed before 27 October 2021 are still subject to the 30-day deadline.

Mixed use

In addition, the Autumn Budget confirmed that, for mixed-use properties disposed of by UK residents, only the portion of the gain that relates to the residential part of the property should be reported and paid to HMRC.

Welcome change

Doubling the time to report a disposal to HMRC through the CGT on UK property account has been welcomed by the CIOT, who have been pushing for changes to the CGT reporting system for some time.

The 30-day deadline has proven challenging ever since its introduction as Helen Thornley has reported. The 60-day filing and payment window provides much needed breathing room for taxpayers and tax advisers alike, especially for taxpayers grappling with complex disposals.

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Advisers of non-resident taxpayers will also be particularly pleased with the reporting extension. To set up a CGT on UK property account, you must first have a government gateway login. Overseas residents can face difficulties receiving their government gateway details within 30 days, particularly if they live outside the EU and/or there are postal delays. Now, rather than face the prospect of completing a paper reporting form, all taxpayers should have time to set up and report disposals through a CGT on UK property account.

However, the CIOT is still concerned that the online system for reporting these gains is difficult for taxpayers to interact with and there are low levels of awareness of the requirement to report among taxpayers.

More could be done

While the CGT reporting extension is good news, across the Spring and Autumn 2021 Budgets, CGT announcements have been sparse.

Many commentators had expected some additional CGT measures to be announced, given the Office of Tax Simplification’s recent Capital Gains Tax review.

Although extending deadline for reporting the CGT on UK property did form part of the OTS’ overall recommendations, the OTS review contained far more recommendations, including; a potential closer alignment between rates of income tax and capital gains tax, reform or replacement of business asset disposal relief (formerly known as entrepreneurs’ relief), and scrapping the little-utilised investors’ relief.

Will any of these recommendations ever come to pass? Only time will tell.

Replies (10)

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By Moo
28th Oct 2021 09:41

Much of the problem with delays in CGT reporting could have been avoided if HMRC or the Law Society had produced a simple handout for conveyancers to give to sellers to warn them of the requirement.
I've advised about a dozen clients now who have only heard about the CGT returns when mentioning to us, their accountants, that they have sold a rental property. No mention has been made by the solicitor dealing with the sale.
Once we know about the sale it has been relatively straightforward to point the client at online links to setting up their CGT account, calculating the gain for them with an estimated tax bill, then talking them through completing the return.

Thanks (3)
Replying to Moo:
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By Catherine Newman
28th Oct 2021 13:13

That's exactly what I do never having seen the setup myself. I have just been told by clients what it says and talk the next one through it.

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Replying to Moo:
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By jonharris999
30th Oct 2021 08:01

+1

The problem is not 30 days v 60 days. 30 days is plenty of time. The problems are solicitors or estate agents not mentioning it, or clients 'forgetting'.

Thanks (1)
By SteveHa
28th Oct 2021 10:58

Quote:
Advisers of non-resident taxpayers will also be particularly pleased with the reporting extension. To set up a CGT on UK property account, you must first have a government gateway login. Overseas residents can face difficulties receiving their government gateway details within 30 days

The last one I did (early in 2021) the NR taxpayer found it impossible to setup a GG account without a UK phone number or address. When do they plan on fixing that?

Thanks (1)
Replying to SteveHa:
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By JoannaU
01st Nov 2021 10:16

I had the same problem with a French client, who is UK resident, trying to set up a GG account for her self-assessment. She need to select 2 out of 3 ways of identifying herself which were a 'UK passport', 'NI driving licence' and a 'credit reference check'. When she clicked to say that she could not provide these and to get some alternative options, she got sent around in circles!

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By petestar1969
01st Nov 2021 10:18

60 days is better than 30 but you still have to basically guess how much CGT is due and aim high to avoid interest if you were to go under.

Daft system!

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Replying to petestar1969:
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By Moo
01st Nov 2021 14:32

Problem with 'aiming high' as you say is that then when the SA return is submitted and client is due a repayment of CGT this is not offset against their other liabilities and has to be repaid by a technician at HMRC.

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By cfield
01st Nov 2021 12:10

What I would do in this situation is print a hard copy of the structured email we used to do for NRCGT returns (I did a few of these) from past cases, put sticky labels over the old data, write in the new data, photocopy it and post that to HMRC (by recorded delivery) with my own computation attached. Put no mention of your own firm or they'll just reject it as non-authorised. Send a scanned copy to the client and tell them to look out for the payment reference.

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Replying to cfield:
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By Woodipar
01st Nov 2021 17:35

You should try doing this as an Executor. After much phaffing around the online system, I rang HMRC (waited and waited) only to find out when I was connected that I could not use the online system as an Executor. They sent me a paper return and 4 months later I am still waiting for a payment reference.

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By North East Accountant
01st Nov 2021 13:04

The 30 days is not the problem....the problem is HMRC's crazy system to get authority as the agent to file online.

We have it all working like clockwork now.........by ignoring the online system and submitting a paper return......and it works a treat.

This is HMRC's brave new digital world where it is more efficient to submit a paper return (something we haven't done for decades) than use it's new digital system.....but hey we're going to have the most advanced tax system in the world apparently.

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