HMRC have recently issued their second report as part of their Capital Gains Tax Review. This report considers key practical, technical and administrative Capital Gains Tax issues.
This second report covers a wide range of areas – from moving home to getting divorced, running or investing in a business or issues affecting land transactions. It also highlights a broader concern about the low level of public awareness of the tax, and the extent to which the administrative systems could do much more to support taxpayers.
Upon publication of the report, Bill Dodwell, OTS Tax Director said:
“Together these two reports make up the most comprehensive review ever conducted of the tax and the practical experience of those who report or pay it. Many people have limited awareness or understanding of Capital Gains Tax. As the tax tends to affect taxpayers on a one-off basis (over 70% of those paying it in the eleven tax years to 2017-18 did so only once in that period), they do not so readily pick up the knowledge and experience that comes from dealing with something regularly.
This means it is particularly important that the rules, and HMRC’s guidance and processes, are intuitive and fit with the practicalities of life, so far as possible.”
The report makes 14 recommendations, including in the following areas
- Integrating Capital Gains Tax into the Single Customer Account
The report recommends that HMRC integrate all the ways of reporting a Capital Gain into the new Single Customer Account
- UK Property tax return
Potential increase in time to make a property tax return
- Private Residence Relief nominations
Raise awareness of how the rules operate and to enable nominations to be captured through the Single Customer Account
- Divorce and Separation
Provide divorcing or separating couples with an extension so that they are not unnecessarily penalised if their affairs take longer to resolve
- Treatment of deferred proceeds when a business is sold
The report considers whether Capital Gains Tax should be paid at the time the cash is received in situations where proceeds are deferred
More details can be found via the link below.
If you have any immediate questions about Capital Gains Tax, please get in touch with a member of the team. We’ll be happy to help.