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HMRC is developing a new system for reporting and paying capital gains tax (CGT) on UK residential property. The requirement to report and pay tax on such gains within 30 days of completion comes into force on 6 April 2020.
HMRC is recruiting agents and their clients to test the system in advance of the start date. The testing will include setting up the client’s CGT account and authorising the agent in the live system, but not the reporting of transactions. Separate agent authority will be required to act for a client for this service; authority for income tax self assessment will not be sufficient.
Details of how to participate, including the HMRC email address to contact, are included in the attachment below. Clients who volunteer should be anticipating making a sale of UK residential property on which CGT will be due after 5 April 2020. Testing started on 6 January 2020, but agents can ask to defer their involvement until after the self assessment deadline.
The new rules were explained in an article by Rebecca Benneyworth in the August 2019 edition of TAXline and further detailed guidance will be published in due course. The new requirements do not apply to transactions on which no tax is due (eg, where the gain is fully covered by private residence relief).
The Tax Faculty would be interested to receive feedback on the service – please contact firstname.lastname@example.org.
Malcolm, I’m not convinced you got the right answer from HMRC. Couldn’t you amend the 2018/19 return to reflect the gain and tax reported in real time and get the refund through SA?
Another 'separate system' when we all require 'joined up' systems. Our client used this method to report a 2018/19 gain a year ago and only told us when his SA return was completed last month. He paid over the CGT as calculated last year. Luckily he kept screen shots. The CGT calculated was reduced when his total income confirmed. Some lengthy phone calls to HMRC and we are told any refund has to be requested in writing from a separate transactions section as it does not impact on the self assessment tax account. Crazy situation and several steps backwards surely.
I could not agree more
This is another stupid proposal, brought on no doubt by the fact the UK has insufficient money. It is widely acknowledged that HMRC cannot do anything within 30 days, so why should they be entitled to expect other people to do so. In passing, it is yet another prejudicial attack on residential property. Why is it still being singled out? This time it doesn't only cover 'buy to let'; it also covers main residences where there have been disallowable absences or absence due to a separation or divorce . LEAVE IT ALONE!