Capital Gains Tax Advice

CGT can be a confusing topic for many people who have sold property. Find out more about why this affects thousands who pay late penalty fees and what you can do to avoid this.

Capital Gains Tax Advice
Find out why 20% of tax payers did not file their CGT on time.

(3 minute read)

We will cover:

  • Capital Gains Tax Advice: what is the latest legislation
  • Why thousands of tax payers were liable to late penalty fees

Property Reporting Service

HMRC has a deadline of 60 days to file and pay tax returns on property capital gains. 

Going past the time window incurs late penalties and added interest. 

According to HMRC, 20% of taxpayers failed to file their CGT on time in 2021/22. 

Why did this happen? 

First, due to lack of clarity.  

To report capital gains after completing a property sale, you use the online service, the “Property Reporting” service. It came into effect in April 2020, but only published a brief guide three months after. Now, there is a full manual explaining how it works. 

Also, difficulties in using the service are the reason why taxpayers file late. Many times, either taxpayers or agents face technical errors when using the service, making it difficult to report on time. 

Note that the Property Reporting system is different from the self-assessment service.  

Therefore, when reporting capital gains from disposing of a property, you should login to the Property Reporting system. 

Self-assessment and the CGT service 

If you’re completing a self-assessment tax return, make sure you file capital gains separately but do this in the right order: report to Property Reporting service first. 

The exception to this is when a sale is made before the end of the tax year and falls within the 60-day deadline. If you include this in your self-assessment you should be fine with not filing the return separately to the CGT service.  

Changes to deadlines: from 30 to 60 days

The CGT reporting service came into effect right in the middle of lockdown, in April 2020. 

The deadline to report was 30 days, which was not nearly enough to make the necessary returns on time. 

For this reason, the period was extended to 60 days in October 2021. However, a larger percentage of people still missed the deadline period and became liable for penalties.  

In 2020/21, of the 137,000 who made capital gains on property, 26,500 (20%) filed a late return.  

In 2021/22, of the 90,000, 28% filed in late. 

Avoid late penalties

These numbers may be an underestimation, as they don’t consider those who did not file their gains at all or are yet to do so. HMRC is chasing up those who failed to pay for 2020/21 tax returns and is demanding a paper return called PPDCGT. This paper form can be requested via telephone to HMRC. 

Many solicitors were unaware of the 30/60-day deadline, resulting in late penalties for property sellers.  

Penalties of £1,600 or more accrue over the first 12 months from the filing date, and these start from £100 on the first day past the 60-day deadline. See last week’s tax tip for more about this. 

If you are liable to file and pay CGT, please contact the most reliable Capital Gains Tax Advice. We will help you keep up to do date and compliant with the latest legislation. 

Contact us today at 01772 788200 to find out more about how we can help, or WhatsApp us out-of-hours at 07787 010190. Sending an e-mail is simple too, just fill out the short form below and we’ll get back to you!

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