An official review of the Capital Gains Tax (GGT) has recommended that those selling property should be given 60 rather than 30 days to report and pay their CGT or that estate agents and conveyancers should mandated to distribute information to their clients about the tax.
This is the recommendation from the Office of Tax Simplification (OTS), which has now published its second report on CGT following initial recommendations published in November last year.
This would give the 150,000 people who report their property sale to the tax authorities each year more time to work out if they are due to pay CGT, and for the 85,000 who are usually liable to pay it more time to file their UK Property tax return.
“The former approach would simply create a longer window, and the latter more subtly by making taxpayers aware of their obligations earlier on and so giving them more time to prepare in advance of the sale,” its report says.
“The predicted cash flow effect on the Exchequer in the 2021-22 tax year of extending the deadline to 60 days in estimated to be approximately £105 million.
“The cost would come down significantly in subsequent tax years, and this figure needs to be considered in the context of the £935 million that this policy change raised in tax year 2020-21.”
Chris Norris, Policy Director (pictured) of the National Residential Landlords Association says: “Landlords should always ensure they meet all legally required deadlines to pay tax.
“That said, today’s report from the Office for Tax Simplification demonstrates a woeful lack of communication and consideration by HMRC about what is expected of those liable for the tax.
“It adds weight to the argument that the seemingly arbitrary, 30-day deadline has created more problems than it solves. We would support the OTS in recommending an extension to 60 days to avoid landlords missing a shorter deadline, potentially through no fault of their own.”
There are three main ways of reporting a capital gain – through Self Assessment, the UK Property tax return, and the ‘real time’ Capital Gains Tax service.
The OTS has recommended changes to each of these but the” overarching recommendation is that these should be brought together in the Single Customer Account”.