Self Assessment End October

Jenga12

I usually do a paper self assessment as I have a rental property. I do this around this time each year but this year, there will be a gain from another source which will incur Capital Gains Tax. This has yet to be finalised. If I send in the form without the Capital Gains source, can I contact hmrc later, once it's finalised? 

[Deleted User]

I wouldn’t - but if the gain was before 5th April 2020, you have all the details? Otherwise, don’t submit the return and do it online.

Declaration

I declare that the information I’ve given on this tax return and any supplementary pages is correct and complete to the best of my knowledge and belief.

I understand that I may have to pay financial penalties and face prosecution if I give false information.

Signature

Jenga12

It's an inheritance on a share of a property that was bought in the 1960s. It's not finalised but we're in process of the final signing of documents on the sale. I think it may take another couple of weeks. Yes, I understand what you say and agree it would be best to wait until after it's all done and do online.

[Deleted User]

When is the contract date or, to be more specific, the date upon which the sale becomes unconditional? Has that date happened yet?

Jenga12

No it hasn't. It's just been transferred into our names and we sign early next week to allow the sale to the buyer but there's one beneficiary who may put a spanner in the works. There's also cash but nothing's to be shared out until it's all done.

[Deleted User]

So - there has yet to be a sale. Which begs the question - why would it go on last year’s return? 

If you sign next week the gain will go on the 2020/21 return but note the new rules about notification of residential property sales.

https://www.att.org.uk/sites/default/files/HMRC%20CGT%20deadline%20changes%20April%202020.pdf

Jeremy535897

Firstly, from what you say the sale is in 2020/21 (date of exchange usually for property), so irrelevant to your 2019/20 tax return. Secondly, the sale has to be reported within 30 days of completion using the online system. See:
https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

Jenga12

Thanks for replies. I just want to make sure I understand - say the sale gets finalised in November, I need to notify hmrc within 30 day; do I pay the cgt within 30 days also? I think the solicitor mentioned this, which is why I thought it had to go on this year's paper tax return. 
Even if I pay it this year, it would still go on the 20/21 tax return?

[Deleted User]

The return that you are submitting currently must declare all income and gains for the tax year 2019/20. You may be completing it ‘this year’ but it is not this year’s tax return. The gain on the sale, if there is one, did not take place in 2019/20 and does not, therefore, be included on the return for that year. I really cannot fathom why something that has yet to happen can be relevant to an earlier year.

You are correct with regard regard to the declaration and payment of the capital gain. You do know that the gain will be calculated on the increase in value from inheritance (probate value) to sale?

Jeremy535897

I assume the confusion is arising because the timing of the online return for 2020/21 (30 days from completion) and the paper deadline for a 2019/20 return (31 October) are near to each other. OP, the two are entirely separate. The gain on this property does not go on your 2019/20 return, but you do have to do an online return and pay any capital gains tax 30 days after the sale completes. When you do your 2020/21 return next year, you will include the gain and the tax already paid.

[Deleted User]

Jeremy535897 said:

I assume the confusion is arising because the timing of the online return for 2020/21 (30 days from completion) and the paper deadline for a 2019/20 return (31 October) are near to each other. OP, the two are entirely separate. The gain on this property does not go on your 2019/20 return, but you do have to do an online return and pay any capital gains tax 30 days after the sale completes. When you do your 2020/21 return next year, you will include the gain and the tax already paid.

Fair point. I note that the Office of Tax Simplification celebrated its tenth anniversary last month. 😕