Reporting a Capital Gain on property

jacobi1

Not sure if I'm best asking here or in the tax section.

Anyway, has anyone got experience of using the HMRC "Report Capital Gains Tax online Service

(sorry - not allowed to link but
https / www
then
tax.service.gov.uk/gg/sign-in?continue=%2Fforms%2Fform%2Fcapital-gains-tax-real-time-transaction-return%2Fnew&accountType=individual
)

I've just logged in and started, but the form requires

*the purchase date and price
* the Exchange (sale) date and price
* various amounts to offset (selling costs, annual allowance etc
* Net amount you gained from selling, giving away or swapping your asset
* Total amount of Capital Gains Tax owed

I assume they are expecting the Net amount gained to be based on the previous figures (purchase/sale price less costs etc), and the amount owed to be the total owed based on those figures.

The issue is that we are 4 joint owners with shares of 1/3, 1/3, 1/6, 1/6th, and are each reporting our own gains. So our individual gains are much less, as is the amount we each individually owe.

So do I (in my case) calculate 1/3rd of the purchase price (and sale price) and use that in the purchase/sale boxes? I imagine that will cause issues as obviously the recorded prices are very different.

Anyone come across this?

I tried calling HMRC but gave up after about 40 minutes!

00ec25

taxation is of the individual (real) person and since you are not a company then the liability for any CGT falls on each owner in accordance with each owner's individual share

Have you read the basics?
https://www.gov.uk/capital-gains-tax/work-out-need-to-pay

step 1: "Work out the gain for each asset (or your share of an asset if it’s jointly owned)."


so each person reports their respective 1/3, 1/3, 1/6, 1/6th which may mean one or more of them do not actually have to report anything if they have no tax to pay.

Note however, that if an individual person is already required to submit a tax return for another purpose then that person must complete the CGT pages in full even if they have no tax to pay as a result

jacobi1

Thanks. I get that.

So the answer I should enter to the question:
"What was the property's market value when you became the owner?"
is not £725,000, but £241,666 (ie my third share of £725K ).

and the answer I should enter to the question:
"How much did you sell the property for?"
is not £850,000, but £283,333 (my 1/3rd share).

That makes sense from the point of view of my capital gain, and hence liability, but does not seem a strictly accurate answer to the precise question asked online.

bowlhead99

jacobi1 wrote: »

and the answer I should enter to the question:
"How much did you sell the property for?"
is not £850,000, but £283,333 (my 1/3rd share).

That makes sense from the point of view of my capital gain, and hence liability, but does not seem a strictly accurate answer to the precise question asked online.

Yes it does... "How much did you sell the property for?" They are asking about "the property" you have sold which you owned and which realised a gain for you. A third of the land and buildings belonged to you, and two thirds belonged to somebody else. So your personal property being subjected to the CGT regime was a one third ownership share in some land and buildings.

When they ask what that property cost or was worth on x date and what it was sold for - tell them 241.6 and 283.3

Don't think of it as being the whole, literal, property. Your property in this context is what it was that you owned which was sold and is now being subject to the capital gains regime.

For example, say you and your friends are having a big clear out so you each share a car to go to the car boot sale to get rid of your old books and CDs and jewellery and paintings and antiques, and some of these things are really valuable so collectively you end up with hundreds of thousands of pounds worth of proceeds. Presumably you will have agreed in advance that even though you are selling it all out of one car boot and manning the sale together, you get to keep the cash proceeds from your stuff and they get to keep the cash for their stuff.

So, when HMRC is curious about tax and says, "hey, I understand you recently went and sold a load of YOUR personal property down at the car boot sale, what profit did YOU make?" ; you don't tell them the total of everything that was in the boot, you only tell them about the proceeds and the original costs of your property. That way you can take your personal annual exemption on your property, if you have not already used it for something else, and they can take their exemptions on theirs.

jacobi1

Thanks bowlhead.

So 'property' in this context = 'a possession I own', rather than a 'building'.

:beer: