HMRC confirms workaround for CGT
Problem. A problem arises where there has been a return made using the UK Property Reporting Service in the relevant tax year. Where a UK-resident client makes a disposal of a UK residential property and there is likely to be tax to pay (based on the facts available at the time), they must report this to HMRC and make a payment of the estimated tax due, within 30 days of completion.
Overpayment. It’s not unusual for the initial payment to be excessive. The exact rate of capital gains tax charged depends on income for the whole year, which might not be known at the time of the disposal, e.g. for sole traders etc. Losses may also arise later in the tax year which can be offset against the gain in the tax return, but not on the 30-day return.
System. Unfortunately, the self-assessment system will not offset any overpayment automatically. HMRC has confirmed that you need to use the agent dedicated line to request a manual offset for any affected clients.
Pro advice. An alternative is to file an amended property return, but you won’t be able to do it if your client has losses to use from later in the year.
Q&A. HMRC has also published a helpsheet aimed at advisors that answers numerous queries about assisting clients in a number of related scenarios (see Follow up ).
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