As we explained on 2 July 2020 and in earlier newsletters, a 30-day reporting requirement for gains arising from UK residentially property came into effect for property deals completed on and after 6 April 2020. The CGT due must also be paid within 30 days.
There was a soft-landing for property completions before 1 July, when penalties for missing the 30-day deadline were not imposed, but now they are, and the penalty structure mirrors that for late SA returns. This tight deadline may mean estimates have been used in the calculations, leading to under-declaration or overpayment of tax. However, you can now correct a UK property return which has been submitted online.
There have been a number of teething problems with this new system, some of which have been fixed, but most haven’t. The ICAEW Tax Faculty has a good summary of all the difficulties and work arounds in Tax Guide 15/20 (see link).
Some of the issues are:
- Agent authorisation – there is a separate process to go through to allow you to complete and file the UK property return. This is needed even if the vendor is already our client. The client needs to use their Govt Gateway account to do this.
- More than one acquisition date – the system doesn’t accept that this can happen
- Deceased estates – executors and PRs can’t appoint an agent to complete the UK property return, they need to file themselves using their own online credentials, but chose the option “file on behalf of another person”.
- Trusts – need to be registered on the Trust Registration Service in advance of the property disposal so HMRC can provide a UTR number or TRS number.
- Non-residents – those who don’t have a UTR or NI number find it difficult to register to use the system, but there is an alternative process which only needs an email address.
Written by the Tax Advice Network