Capital Gain within annual allowance

moley166

If I have a capital gain on sale of shares which is below the annual CGT allowance, is it required to report this to HMRC? I am a pensioner and not normally involved with a self-assessment report. Any experience? Thanks.

Biggles

https://www.gov.uk/capital-gains-tax/work-out-need-to-pay

Keep_pedalling

You only have to report gains below the annual threshold, if you normally complete SA and the disposal is more than 4 times the annual allowance, so in you case you don't need to inform HMRC of your gain.

Biggles

Keep_pedalling wrote: »

You only have to report gains below the annual threshold, if you normally complete SA and the disposal is more than 4 times the annual allowance, so in you case you don't need to inform HMRC of your gain.

Ah, I thought you always had to report if the total disposals were in excess of 4 x the allowance; no?

bowlhead99

Biggles wrote: »

Ah, I thought you always had to report if the total disposals were in excess of 4 x the allowance; no?

AFAIK, only if you are otherwise required to report (e.g. if you're already doing self assessment, or if you're sent a notice to do a return).

The legislation (section 3a, TCGA'92) says that if you are given any notice under section 8 of taxes management act which requires you to provide information for the purposes of establishing the amount for which your activities are chargeable to capital gains tax... but your gains are below the exempt amount *and* the total value of disposals don't go over 4x the exemption... then you can simply make a statement to that effect and it's sufficient compliance.

The takeaway from that is that if you're required to do a return but you *don't* fit under those deminimis thresholds (because either your gains are over the exempt amount, or you have high disposal proceeds, or both) then you will need to give them the details.

The further takeaway is that if you're *not* given a notice to complete a return... and you don't have any tax liability and don't want to claim any losses, so aren't going to be telling them that you have a reason to do a return, inviting them to tell you to do one... then there is no requirement to tell them about the activities that led to your disposal proceeds whether those disposal proceeds are £4.5k or £45k or £450k.

The latest gov.uk website on the link from post #2 above which tries to condense the main bits of law into a small space, says something along the lines of, "even if your gains are below the allowance, tell HMRC if you disposed of assets >£44.4k or you want to claim losses; report these in your tax return (or if you're not registered for SA you can write to HMRC instead)".

Summarising the facts and options in the way they do on the link like that will cover all the people who need to do returns or want to claim losses, and can only lead to over reporting rather than under reporting if people follow those steps. So it works for HMRC.

But if you're not registered for SA, haven't received a request to do a return, don't want to claim losses, and don't have gains that are non exempt, then there is no need to do a return, nor a letter.

Pincher

So:

"If you had a baby, you don't have to tell us, because we don't really care; but if you were going to write anyway, tell us, just to be polite, because we may get offended because you are treating us like our feelings don't matter."

bowlhead99

Your brand of irreverence is quite refreshing... But no, not really...

"1 we want to know about your divestment activities if you are the type of person who is being asked to do a tax return or you are someone who wants to prove you have losses to carry forward.

2 if you don't have to do a tax return you could stick your losses claim in a letter instead.

3 We don't want to scare people off using this consumer-facing webpage by putting the entire 10,000 pages of Tolley's Tax Bible on the page so we will try to make the headline bullet points as concise as we can.

4 only a small number of people who are not already doing tax returns or claiming losses will have large disposals with no non-exempt gains, so we're not bothered if one of those people thinks the implication of what we wrote is that they should send us information about disposals when they have no reportable gains and we didn't ask them for a return. Worst case scenario we get data we won't use, that's not the end of the world for us.