As you may be aware, certain property sales need to be reported to HMRC ‘in year’ , i.e. within 60 days of completion of the sale, separately from the annual Self Assessment tax return.
The capital gains tax return must be filed online. If the taxpayer is unable to use the online capital gains tax account (for example, because they are unable to register with HMRC online services or they are ‘digitally excluded’) they can request a paper return from HMRC.
The process of online authorisation by a taxpayer of an agent (an accountant or tax adviser) to file the online return on their behalf can be onerous, particularly for those who are not digitally aware. The following is a step-by-step guide to the process for an individual needing to file a capital gains tax on UK property return:-
Step 1 – You need to register for a government gateway account.
Go to HMRC’s login page.
Click the green sign in button.
Click “Create sign in details”
Enter your email address where asked.
You will now be emailed a confirmation code. Use this code to confirm your email address.
You will now be issued with a User ID for your government gateway account.
Step 2 – You need to create a capital gains tax on UK property account.
Log in to government gateway account
Create a capital gains tax on UK property account
You will be asked to prove your identity by providing two items, for example UK passport, payslips / P60, or credit record.
Non UK residents who only have one form of ID for verification should answer ‘no’ to the question “do you have a National Insurance number”.
You will receive an email containing a capital gains tax on UK property account number.
Step 3 – You need to authorise your agent to file the capital gains tax return on your behalf
Provide the capital gains tax account number to your agent / accountant together with the postcode when creating the account or, if overseas, the country of residence.
The agent requests authorisation online
HMRC issues a link to the agent to forward on to you
You accept the agent’s request for authorisation by clicking on the link. You will will be prompted to log in to the government gateway account before you can do this.
Step 4 - Preparation and submission of online capital gains tax return
The agent/accountant/tax adviser prepares capital gains tax calculations, completes the capital gains tax return and submits it to HMRC following approval by the taxpayer
Step 5 - You pay the capital gains tax liability to HMRC
On submission the agent is provided with a capital gains tax payment reference number which the taxpayer will need to use when making the payment.
Payment can be made online using debit or corporate credit card or by bank transfer (payments from an overseas bank account need to be made to a separate HMRC account) or by cheque.
Details on how to pay can be found here.
Contact Us
Please contact us to find out how the above applies in your circumstances and how you can reduce your tax liabilities and maximise your tax efficiency.
Please note that the above is for general information only and does not constitute financial or tax advice. You should not rely on this information to make or refrain from making any decisions. You should always obtain independent professional advice in respect of your own situation.
