Capital Gains Tax (CGT) is tax due on the profit you make once you sell an asset that has increased in value.

In the UK, it is crucial to understand the requirements for disclosing Capital Gains to HMRC within the set timeframe, to ensure compliance and avoid penalties.

1. CGT Disclosure & Payment The rules for reporting and paying CGT in the UK vary based on the type of asset sole and your residency status.

• For Residential Property (Post-April 2020): If you have sold a UK residential property on or after 6 April 2020, you must report and pay any CGT due within 60 days of the sale.

For Other Assets: If your Capital Gains is not from a residential property sold after 6 April 2020, you can report it either in a Self Assessment tax return or using the ‘real time’ Capital Gains Tax Service.

2. Preparing for CGT Disclosure Before reporting your gains, it is crucial to gather all the necessary information, for example:

• Purchase and sale prices of the asset
• Dates of ownership
• Costs related to buying, selling and improving assets
• Tax reliefs, allowances, or exemptions you’re entitled to claim

For Non-UK Residents: If you’re not a UK resident but have sold UK property or land on or after 6 April 2020, you must report all sales and disposals of UK property or land by the deadline, even if no tax is due.

3. Reporting CGT: Online and Paper forms The method of reporting depends on various factors, including the type of asset and your ability to access online services.

• Online Reporting – Use a Capital Gains Tax account to report and pay tax on UK property. You’ll need a Government Gateway user ID and password to set up or access your account.

Paper Reporting – If you are unable to report the CGT online, you would need to download and fill a paper form or ask HMRC for a paper form.

4. Special Cases You may fall under a special case –

• Jointly Owned Properties – Each co-owner must report their gain or loss individually. Special rules apply if you give a UK property to your spouse, civil partner, or to charity.

Reporting on Behalf of Others – If you are reporting on behalf of someone else or an estate, you’ll need proof of authority, like lasting power of attorney or proof of executorship in case of death.

5. Consequences of Non-Disclosure

• Failure to Notify – If HMRC discover an unreported capital gain, the consequences can be significant. This can include, not only the payment of the tax owed but also potential penalties and interest charges. In serious cases, this could lead to prosecution and criminal charges for tax evasion.

Do not delay in making the disclosure and reach out to us if further assistance is required and we would be happy to help.

If you have any queries the tax department here at Enhance can of course help, please drop us a line at tax@enhance-professional.co.uk