After detailed work with key stakeholders, including Chartered Accountants Ireland, HMRC has now published updated CGT guidance on UK property disposals as an appendix to its capital gains manual. HMRC has also sent an update in respect of scenarios where a late filing penalty was incorrectly issued to a small number of taxpayers who made a property disposal. HMRC apologises for any inconvenience this may have caused.
For the 2020/21 tax year, HMRC incorrectly issued six and 12 month late filing penalties to a small number of taxpayers who made a property disposal. HMRC advises that is has now corrected this and cancelled the penalties which were charged in error.
HMRC has been writing to all affected taxpayers to notify them of this error and to reassure them that the incorrect penalty has been cancelled and they will be refunded where payment has already been made.
For most taxpayers, no further action is needed. However, some will be asked to contact HMRC to provide their bank details to make a repayment.
Late filing penalties will still apply to those taxpayers who filed a return late. Unless they receive a letter confirming otherwise, those taxpayers will still be expected to pay their late filing penalties.
The new guidance on UK property disposals is broken down into three sections as follows:-
- Accessing the CGT on UK property account;
- Submitting returns through the CGT on UK property account; and
- Interaction with self-assessment.
HMRC advises that it will be keeping all three sections of the guidance under review, and comments on inaccuracies or areas where you would value additional clarification remain welcome. Changes will then be considered alongside the review and update for 2021/22, which will include information on the approach to ‘initial overpayments’ for tax year 2021/22 onwards – the current material on ‘initial overpayments’ focusses on 20/21 only.
Readers are advised that the online service has yet to be updated to reflect the change announced at Autumn Budget 2021 to extend the deadline for reporting and payment from 30 days to 60 days. The timeline for implementation of this change is not yet available.
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