CGT query

utab007

jimmo wrote: »

Politically speaking, you seem to have that back to front.
HMRC don't so much challenge a particular point but ask you to justify your own self assessment. So the onus will be on you to prove your claims to Private Residence Relief are correct in principle and that your capital gains computation is correct.
The reality is, of course, that the risk assessment processes will highlight particular aspects but the legal niceties remain that the onus of proof will be on you, not HMRC.
As we seem to agree, selling 2 properties in the same tax year and claiming Private Residence relief on both will put you in much more danger of an Enquiry than most.
If the Enquiry Officer who is allocated the case does his homework properly then before he sends you the formal Notice of Enquiry he will already be aware of your history of purchases and sales of properties, any previous claims to Private Residence Relief and whether the respective purchase and sale values of each property fairly reflect the open market.
Depending on what his research turns up the Enquiry Officer could suspect you of being a property developer who is trying to disguise his property development business behind living in the properties and letting them.
However, no Enquiry Officer worth his salt would simply blurt out an accusation. He would ask you to justify your claim to Private Residence Relief and see what develops.
The taxman's preferred option would then be an interview to discuss your personal reasons for each transaction. In those types of interview, examining what you did and why, your accountant would struggle to justify opening his mouth and I have told more than a few to shut up and none of them objected or complained about me.
I like to think that if you are fiddling, knowingly or unknowingly, I would catch you out. I also like to think that if everything is above board I would be able to see that and back off pretty quickly.
Your problem is that you already have an accountant who seems to know less about Capital Gains Tax than you do but the person who is telling you that is some anonymous Wally on an internet forum.

Hmm...okay, so I will complete my self assessment as required and if they come back with any questions I will answer it.

Jimmo, you seem to be under the impression I have something to hide. I'm not sure what you spotted from my earlier posts, but I can assure there is nothing dodgy going on here.

Let me make this clear!! I'm not a property developer claiming PRR to avoid paying CGT. And I haven't sold any property previously. The earlier posts you have seen refers to the same properties I sold in this tax year. I used to live in those properties, so my claim for PRR is valid and if necessary I will prove it.

Only made this post to check my understanding of CGT. I appreciate you confirming my calculation is correct and I think it's great we have retired HMRC tax advisers helping on this forum. But I think your over stepping the mark by playing detective and suggesting my claim may be dodgy.

sunshinetours

You seem to have worked out by yourself what your potential CGT issues are pretty much fine.

I would be more worried that your "accountant" couldn't help you. I assume they are not a qualified accountant but more a bookeeper type "accountant"

Your circumstances are hardly complicated even though very slightly out of the norm. There will be many many tax payers who bought a house and decided to keep it when they bought another property when they either got married or together with a new partner. providing the dates are all clearly documented you shouldn't have too many issues if challenged

I would also be very careful about accepting advice from HMRC call centres - they are notoriously unreliable and inconsistent in the "advice" they give

EDIt I assume your rental income was shown on your previous returns, not sure that has been mentioned?

utab007

sunshinetours wrote: »

You seem to have worked out by yourself what your potential CGT issues are pretty much fine.

I would be more worried that your "accountant" couldn't help you. I assume they are not a qualified accountant but more a bookeeper type "accountant"

Your circumstances are hardly complicated even though very slightly out of the norm. There will be many many tax payers who bought a house and decided to keep it when they bought another property when they either got married or together with a new partner. providing the dates are all clearly documented you shouldn't have too many issues if challenged

I would also be very careful about accepting advice from HMRC call centres - they are notoriously unreliable and inconsistent in the "advice" they give

EDIt I assume your rental income was shown on your previous returns, not sure that has been mentioned?

Thanks for your comments sunshine.

Why should I be worried that my "accountant" couldn't help? I don't follow...

I agree, I don't think my circumstances are that uncommon. All I did was move from one house to another and decided to let it out instead of selling up. Funny enough I did actually have the option to sell and all those years later I sold at almost the same price.

I know what you mean about accepting advice from HMRC. I was reasonably sure about my understanding before I sold them, so it was just to double check. Anyway, good to get confirmation from you and others.

I could have done without the accusations of a dodgy claim. Why do some people always think the worst?

Yes, I have been declaring my rental income. So nothing to worry about.

silvercar

I don't think jimmo was saying you were dodgy, just outlining how inspectors operate. Taxmen's job is to distinguish the genuine from those with something to hide and his openness of how an enquiry would be conducted (and why) was to help you, not to accuse you of anything.

The comments about your accountant are that he appears to know less than you have found out for yourself, generally people employ professionals for their knowledge and yours doesn't seem to have the expertise in the area that you are concerned with.