Capital Gains Tax form & payment

[Deleted User]

July 2022

Good afternoon 

I’ve been reading through HMRC guidance notes for filling in a self assessment tax form. I what sections I have to fill and which I do not. It seems quite reasonable. Is there any necessity to pay a tax accountant to do this for me given I have to collate, prepare and provide all the information to the tax accountant myself. I understand which boxes to fill in and what goes in those boxes. I have to write a statement of explanation. So how am I benefitting from Paying an accountant to do this for me? I have already paid a French tax account €1800 to do my French Taxes and the form looks like a 5 year old filled it in in crayon. In some areas he actually typed over figures he already had written in. The form looks ‘unreadable’. 

Could you tell me the benefits of using a paid service please? 

Alternatively, if you feel it’s simple enough to fill in the forms yourself please could you relate your thoughts and experience and any tips…

I’d like to know where I actually get a form to declare and pay my Capital Gains and how I make payment.

Thank you

NedS

You have posted in the Benefits section. You probably want to post your question to the Cutting Tax section, where you are more likely to receive an answer. I have sent a report to request it be moved to the appropriate section for you.

[Deleted User]

NedS said:

You have posted in the Benefits section. You probably want to post your question to the Cutting Tax section, where you are more likely to receive an answer. I have sent a report to request it be moved to the appropriate section for you.

Ok…apologies. Thank you for doing that. Have a lovely evening 

MSE_ForumTeam5

Thread moved

[Deleted User]

In the majority of cases the completion of a self-assessment return is relatively simple. However, I note that you have paid an accountant in France to look after your French taxes. What is your residency status? (Non resident form part of the return cannot be completed online)  If you have foreign income, capital gains etc and have no experience of self-assessment the process may not be as straightforward as you think. 

[Deleted User]

purdyoaten2 said:

In the majority of cases the completion of a self-assessment return is relatively simple. However, I note that you have paid an accountant in France to look after your French taxes. What is your residency status? (Non resident form part of the return cannot be completed online)  If you have foreign income, capital gains etc and have no experience of self-assessment the process may not be as straightforward as you think. 

good morning purdyoaten2

I had to use an ‘approved’ tax accountant suggested by the French Notaire that cost €1800…for a sloppy job. Compare that to the Quotes I have had from UK ICAEW & ACCA accountants for between £250 and £600 and the UK accountant seems very good value.

I’m a UK Resident with no income from anywhere abroad just a UK State Pension. 

The self Assessment notes HMRC provide seem very reasonable but I have been advised that the accountants fees can be deducted (off set) against the Capital Gains bill. Would this be correct for both the French Tax accountants’ €1800 and the UK Tax Accountants’ £500?  If this is the case the it would seem more sensible to make notes and provide them to the accountant and let them do the Self Assessment. 

I am also deducting Notaires & Solicitors Fees, House Survey fees and one Flight to visit the Notaire for the day.  Is this reasonable and possible? I have receipts for all the work all parties have done. 

I would also like to know once the form and calculation has been prepared (but not yet filed) if I can make an arrangement with HMRC to pay the sum in advance as the filing can not happen until January 31st 2024 for a sale on the 20th June 2022 I have been advised. 

Yes things can change as Governments and laws do but then I know exactly where Is stand and what sum of money I have to buy something with.

Jeremy535897

The relief for expenses of acquisition and sale are limited. On accountants' fees, for example, HMRC's view is:

"Accountant’s fees are allowable only to the extent that they relate to the ascertainment of market value of the assets or to any apportionment for the purposes of the computation. Otherwise, fees for the computation of liability are not allowable."

See https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15250

The cost of the flight to visit the Notaire will not be deductible. House survey fees in France will be a deductible cost of sale.

To calculate the capital gain, you compare the sterling equivalent of the cost (including costs of acquisition) at the date of purchase with the sterling equivalent of the sale price (including costs of sale) at the date of sale. Choosing the right conversion rate can make a big difference. If there were improvements to the property (as defined by the legislation), the sterling equivalent of these may be deducted (based on the exchange rate when the improvements were paid for).

If the property was ever your main residence, some or all of the gain may be exempt. See:
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2022

If there is French tax payable, it may be deducted from the UK capital gains tax payable, but cannot create a repayment if the French tax is more than the UK tax. The French social levy is not a tax for these purposes, but should be deductible in computing the gain for UK tax purposes.

You can submit your 2022/23 tax return at any time from 6 April 2023 to 31 January 2024.

I suggest you seek professional advice.

[Deleted User]

Jeremy535897 said:

The relief for expenses of acquisition and sale are limited. On accountants' fees, for example, HMRC's view is:

"Accountant’s fees are allowable only to the extent that they relate to the ascertainment of market value of the assets or to any apportionment for the purposes of the computation. Otherwise, fees for the computation of liability are not allowable."

See https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15250

The cost of the flight to visit the Notaire will not be deductible. House survey fees in France will be a deductible cost of sale.

To calculate the capital gain, you compare the sterling equivalent of the cost (including costs of acquisition) at the date of purchase with the sterling equivalent of the sale price (including costs of sale) at the date of sale. Choosing the right conversion rate can make a big difference. If there were improvements to the property (as defined by the legislation), the sterling equivalent of these may be deducted (based on the exchange rate when the improvements were paid for).

If the property was ever your main residence, some or all of the gain may be exempt. See:
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2022

If there is French tax payable, it may be deducted from the UK capital gains tax payable, but cannot create a repayment if the French tax is more than the UK tax. The French social levy is not a tax for these purposes, but should be deductible in computing the gain for UK tax purposes.

You can submit your 2022/23 tax return at any time from 6 April 2023 to 31 January 2024.

I suggest you seek professional advice.

Good morning Jeremy535897

Yes I agree about the professional advise. I have arranged a meeting next Thursday with a qualified ICAEW/ACCA tax accountant. 

I have done 100% of the work and everything is ready for that person. Good news for anyone else selling property in France is that you no longer have to pay the CSG (Social Security Contribution) and CRDS (Social Security Dept Repayment Contribution) taxes. You do still have to pay the Capital Gains Tax and the Solidarity Tax but the Capital Gains may be deducted from your UK Capital Gains bill but the Solidarity may not. 

Unfortunately the pound was very strong in 2005 at £1:€1.4775 and so that exchange rate increases the margin of Capital Gain greatly. 

By comparison my siblings are being taxed on €140,000 euros where as I am being taxed on the equivalent of €293,000 because of the exchange rate in the 20th of June 2022 and December 2005. I have no complaints there though. C’est la vie.

I have used the exact daily exchange rates on the exact dates but I believe HMRC may use an average for the specific months in questions? By comparison at the time of sale the pound was £1:€16241. The bank didn’t charge a penny to convert the money upon receipt (so kind of them) but the exchange rate they gave us as ‘live at the time’ was .01775p (one penny and seventy seven hundreds of a penny) different to the actual live exchange rate which cost me nearly £6000. 

Thank you for the advise on the filing dates. These differ from what the tax account advised…that’s why I come here. I always like to get a second opinion. 

Do you know Jeremy if I can make an arrangement with HMRC to pay the Capital Gains sum which will be calculated next week early and leave it on account with HMRC until the time when the actual Tax Return is filed on the 6th April 2023? 

Thank you for your advise and help as always.

Jeremy535897

Have you already registered for self assessment? If not, that is the first thing to do so that you can get a Unique Taxpayer Reference, and complete the self assessment tax return form in due course. Without this, there is no way HMRC can match a payment you make to the (future) tax you may owe.

You can pay tax in advance:
https://www.gov.uk/pay-self-assessment-tax-bill/pay-weekly-monthly

It is not the best thing to do. You would be better putting the funds into a safe bank account (National Savings for example) and earning a bit of interest.

Make sure your adviser carefully considers the method of calculating exchange rates. There are different options available (although you should use the same option for both the purchase and the sale). When the sums are significant, even a small difference can cut the tax bill.

[Deleted User]

Jeremy535897 said:

Have you already registered for self assessment? If not, that is the first thing to do so that you can get a Unique Taxpayer Reference, and complete the self assessment tax return form in due course. Without this, there is no way HMRC can match a payment you make to the (future) tax you may owe.

You can pay tax in advance:
https://www.gov.uk/pay-self-assessment-tax-bill/pay-weekly-monthly

It is not the best thing to do. You would be better putting the funds into a safe bank account (National Savings for example) and earning a bit of interest.

Make sure your adviser carefully considers the method of calculating exchange rates. There are different options available (although you should use the same option for both the purchase and the sale). When the sums are significant, even a small difference can cut the tax bill.

As f 17:01hrs today (Saturday 9th)  I did go to the HMRC website and create an account with a Government Gateway ID and I did register fir self assessment. Does this lead to the generation of a UTR? If not where do I apply and get one? I ticked I needed to pay Capital Gains and listed the end of tax year that it needed to be paid as 05/04/2023. Once the form was completed it just took me to my account page but I can see no UTR number. Have I done something wrong? Is the system set up to provide a UTR number for 05/04/2023?

If possible I will ask them to use the exact exchange rate on the days for both dates. 

Yes I have been advised to place it in a savings account until payment is due and there is sense in this. I’m just motivated to get it paid and done so I have peace of mind and I can see what I have left to buy a home with if I can. 

Jeremy535897

This from HMRC explains what to do:
https://www.youtube.com/watch?v=Ls_wqOstiBM