Capital Gains Tax (CGT) in respect of gains on residential property must be reported and paid to HMRC using the Property Disposals Return Service, as well as being reported in the taxpayer’s self assessment. For properties sold since 27 October 2021, the CGT must be paid within 60 days of completion of conveyance.
In some circumstances, the taxpayer may overpay the amount of CGT due, with this only becoming apparent when they come to file their self-assessment for the year of disposal. For instance, a taxpayer may make a gain on residential property during the 2021/22 tax year and pay the CGT due. The taxpayer’s self-assessment for 2021/22 may include a capital loss on, say, a share disposal, which could be offset against the gain on the residential property, reducing the amount of CGT due. The taxpayer may then be due a refund from HMRC. It would be reasonable to assume that the overpayment would be refunded via the self-assessment process, but this is not the case.
HMRC’s systems are unable to match amounts paid via the Property Disposals Return Service against a taxpayer’s self-assessment account. They advise that if a taxpayer is in an overpayment situation such as the one outlined above, then the taxpayer or their agent should call HMRC on 0300 200 3300 and request a manual adjustment to the self-assessment account. This would mean that any overpayment of CGT could be offset against the taxpayer’s wider self-assessment tax bill or refunded if necessary.
February 22nd, 2023
