Help with reporting a Capital Gain

Ponsienella2

Jeremy535897 said:

One thing that posters on here have had trouble with is making sure that they don't pay capital gains tax twice. This is because they are not correctly recording the credit for tax paid within 60 days of completion in the appropriate box on SA108. When you complete your self assessment tax return, check before submitting it that the tax calculation on the SA302 is giving credit for the tax paid within 60 days of completion.

Okay. Will do. Thanks again. 

Ponsienella2

Help! 

I am currently looking at the SA108 form and it looks really simple...... too simple. It makes me think I must be missing something.

1. Do I have to wait until the new tax year to be able to print off an SA108 for tax year 2022/2023? (The one I printed off States it
    is for 2021/2022).

2. All I have to do is fill in one Residential property disposal.
   Is the amount I put in box 6 the gain after deducting my £12,300 Annual Exemption?  

3. Will this be the same figure for box 9 (as I don't have losses to offset)?

4. As I will be filling in the CGT report online and paying it within 60 days of completion, do I put in the CGT I have calculated I
    need to pay, confirmed by HMRC's CGT form, in box 10?(I will have paid the tax due before I need to submit the SA108). 
    Is that what Jeremy meant by correctly recording the credit for tax aid within 60 days so that I don't pay it twice?

5. Do I then just put the reference number of my CGT Property Disposal form in box 54 and it is then complete?

6. When is the earliest I can submit the SA108? Can I just complete it as soon as the new tax year begins?

So sorry to sound so thick. 

Ponsienella2

Sorry, but I have another question.

I have seen some information on another website www.litrg.org.uk (Low Incomes Tax Reform Group) which states that if I don't usually fill in a Tax Return, that if I use HMRC's 'real time' Report and pay CGT on UK property service to report the gain on my property, I will not need to file a Self Assessment tax return for that year assuming I have no other reason to do so.

It states a self-assessment return is only required if issued with a return by HMRC or otherwise meet Self assessment criteria. 
When I looked at the criteria, I don't think any applies to me.
i) HMRC's ' Check if you need to send a self-assessment tax return'  asks whether I need to pay any Capital Gains Tax. As I will have already paid it through the real time reporting system, am I correct in assuming my answer will be no? 

ii) The form also asks  'Do you need to pay tax on a payment or charge on a private pension?' I don't know what this means.
    I do receive a small occupational pension but it is only £1,335 per annum, so no tax is due on it.

If I do not need to fill in a Self Assessment return, does that mean I also do not need to complete an SA108 Capital Gains Tax Summary?

Any help is very much appreciated.

Jayne

[Deleted User]

You do need to complete a tax return as you are required to pay Capital Gains tax. 

It may be the case that, after paying through the reporting system, you owe no further tax but that evidently means that you have had a liability and, accordingly, must file. 

Charges on private pensions are an entirely different concept from what you describe - you do not need to complete this section. 

On the tax return - it is not possible to complete a return for 2022/23 until 6th April when it comes online. 

You do know that you must complete the whole return, not just the capital gains section? 

There is an opening section designated ‘tailoring your return’ where you choose to complete the sections relevant to you. 

Perhaps it would be better if you came back to us in April after you have had a chance to look at the online version?

Jeremy535897

You cannot complete a self assessment tax return for 2022/23 until 6 April 2023. The software is not available until then. In addition, you have to register for self assessment if you are not so registered. See:
https://www.gov.uk/register-for-self-assessment/not-self-employed

The received wisdom concerning the completion of a self assessment tax return when you have a UK residential property disposal on which capital gains tax is due is that you always have to do so. However, it appears that this is not the case where:

• you are not currently registered for self assessment
• the capital gains tax paid on the online reporting system is correct and no more tax is due
• you have no other reason to register for self assessment

I guess we have all assumed that anyone who sells UK residential property and owes capital gains tax has to register for self assessment because the probability of getting the tax right on a disposal part way through the tax year is small, because of the fact that the rate of capital gains tax depends on knowing your taxable income for the tax year of the disposal precisely, when that year has not finished at the time of reporting the capital gain. If your income is only £1,335 a year (do you also receive a state pension?), though, that is covered by the personal allowance of £12,570 so you can work out the tax on the gain precisely, if you have no other gains or losses. Both LITRG and Ross Martin take this view (although you do have to hunt for it, and well done to you for spotting it).
https://www.litrg.org.uk/tax-guides/capital-gains-tax/capital-gains-tax-reporting#toc-i-do-not-normally-complete-a-tax-return-how-do-i-report-my-gains-
https://www.rossmartin.co.uk/private-client-a-estate-planning/capital-gains-tax/3350-reporting-capital-gains

[Deleted User]

Jeremy535897 said:

You cannot complete a self assessment tax return for 2022/23 until 6 April 2023. The software is not available until then. In addition, you have to register for self assessment if you are not so registered. See:
https://www.gov.uk/register-for-self-assessment/not-self-employed

The received wisdom concerning the completion of a self assessment tax return when you have a UK residential property disposal on which capital gains tax is due is that you always have to do so. However, it appears that this is not the case where:

• you are not currently registered for self assessment
• the capital gains tax paid on the online reporting system is correct and no more tax is due
• you have no other reason to register for self assessment

I guess we have all assumed that anyone who sells UK residential property and owes capital gains tax has to register for self assessment because the probability of getting the tax right on a disposal part way through the tax year is small, because of the fact that the rate of capital gains tax depends on knowing your taxable income for the tax year of the disposal precisely, when that year has not finished at the time of reporting the capital gain. If your income is only £1,335 a year (do you also receive a state pension?), though, that is covered by the personal allowance of £12,570 so you can work out the tax on the gain precisely, if you have no other gains or losses. Both LITRG and Ross Martin take this view (although you do have to hunt for it, and well done to you for spotting it).
https://www.litrg.org.uk/tax-guides/capital-gains-tax/capital-gains-tax-reporting#toc-i-do-not-normally-complete-a-tax-return-how-do-i-report-my-gains-
https://www.rossmartin.co.uk/private-client-a-estate-planning/capital-gains-tax/3350-reporting-capital-gains

I suppose, given that, it would be very likely that any estimate would be correct. Nevertheless the tax return completion would also be extremely simple. In that case, I would probably err on the side of caution and complete it. Interesting point though.

Ponsienella2

Jeremy535897 said:

The received wisdom concerning the completion of a self assessment tax return when you have a UK residential property disposal on which capital gains tax is due is that you always have to do so. However, it appears that this is not the case where:

• you are not currently registered for self assessment
• the capital gains tax paid on the online reporting system is correct and no more tax is due
• you have no other reason to register for self assessment

I guess we have all assumed that anyone who sells UK residential property and owes capital gains tax has to register for self assessment because the probability of getting the tax right on a disposal part way through the tax year is small, because of the fact that the rate of capital gains tax depends on knowing your taxable income for the tax year of the disposal precisely, when that year has not finished at the time of reporting the capital gain. If your income is only £1,335 a year (do you also receive a state pension?), though, that is covered by the personal allowance of £12,570 so you can work out the tax on the gain precisely, if you have no other gains or losses. Both LITRG and Ross Martin take this view (although you do have to hunt for it, and well done to you for spotting it).
https://www.litrg.org.uk/tax-guides/capital-gains-tax/capital-gains-tax-reporting#toc-i-do-not-normally-complete-a-tax-return-how-do-i-report-my-gains-
https://www.rossmartin.co.uk/private-client-a-estate-planning/capital-gains-tax/3350-reporting-capital-gains

Thanks Jeremy.  
I'm not State Pension age yet so my income is definitely only £1,335. 

I do try my best to find things out rather than ask on MSE, so I'd already read the litrg stuff but was confused by other articles suggested I did need to complete a return. I guess we do have a fairly complicated tax system them. At least we have both learnt something. They say 'Every day is a school day'.

I think my husband's will be spot on too, now that he has just been made aware of another pay freeze, enabling us to accurately predict his income for Feb and March.

Thanks again. Your help has been invaluable. I wouldn't have been able to work out my gain correctly without your help.

Jayne

Ponsienella2

[Deleted User] said:

Jeremy535897 said:

You cannot complete a self assessment tax return for 2022/23 until 6 April 2023. The software is not available until then. In addition, you have to register for self assessment if you are not so registered. See:
https://www.gov.uk/register-for-self-assessment/not-self-employed

The received wisdom concerning the completion of a self assessment tax return when you have a UK residential property disposal on which capital gains tax is due is that you always have to do so. However, it appears that this is not the case where:

• you are not currently registered for self assessment
• the capital gains tax paid on the online reporting system is correct and no more tax is due
• you have no other reason to register for self assessment

I guess we have all assumed that anyone who sells UK residential property and owes capital gains tax has to register for self assessment because the probability of getting the tax right on a disposal part way through the tax year is small, because of the fact that the rate of capital gains tax depends on knowing your taxable income for the tax year of the disposal precisely, when that year has not finished at the time of reporting the capital gain. If your income is only £1,335 a year (do you also receive a state pension?), though, that is covered by the personal allowance of £12,570 so you can work out the tax on the gain precisely, if you have no other gains or losses. Both LITRG and Ross Martin take this view (although you do have to hunt for it, and well done to you for spotting it).
https://www.litrg.org.uk/tax-guides/capital-gains-tax/capital-gains-tax-reporting#toc-i-do-not-normally-complete-a-tax-return-how-do-i-report-my-gains-
https://www.rossmartin.co.uk/private-client-a-estate-planning/capital-gains-tax/3350-reporting-capital-gains

I suppose, given that, it would be very likely that any estimate would be correct. Nevertheless the tax return completion would also be extremely simple. In that case, I would probably err on the side of caution and complete it. Interesting point though.

Thanks @[Deleted User]

Are you able to advise me on the points I raised about completing the SA108 in my earlier post?

My brother-in-law does have to fill in a self-assessment return (he does a paper return but I will try and help him move to online) and, with regard to the CGT, needs help. I am going to help him do the online CGT reporting as he was a joint owner of the property we sold.

I think it more likely his income will not be accurately predicted as he has various sources (private pensions, State Pension, Capital Gain, income from investments). 

Jeremy535897

Probably it is best to wait to see the 2022/23 version, as it may change, as purdyoaten suggests. But the gain in box 9 will be the gain before the annual exemption if it is the same as 2021/22, and the tax will be what you paid on the 60 day reporting in box 10. As you will have used your UTR on the 60 day reporting form, this will enable a cross check between that form and the self assessment tax return.

If you decide to complete a SA return, you first need to register for self assessment, per my earlier post, and you should then be able to complete SA100 (the main return, where you will include the £1,335 occupational pension received) and SA108 for 2022/23 from whenever the software is available (probably 6 April 2023).

Ponsienella2

Jeremy535897 said:

Probably it is best to wait to see the 2022/23 version, as it may change, as purdyoaten suggests. But the gain in box 9 will be the gain before the annual exemption if it is the same as 2021/22, and the tax will be what you paid on the 60 day reporting in box 10. As you will have used your UTR on the 60 day reporting form, this will enable a cross check between that form and the self assessment tax return.

If you decide to complete a SA return, you first need to register for self assessment, per my earlier post, and you should then be able to complete SA100 (the main return, where you will include the £1,335 occupational pension received) and SA108 for 2022/23 from whenever the software is available (probably 6 April 2023).

Thank you yet again. You are my saviour.

I thought it was the gain before the annual exemption but allowed myself to let my husband confuse my logic.

I think I will take the advice of both you and purdyoaten2 and have a look when the new tax year starts. For now, the main thing is reporting the gain then paying it when we receive payment references.

Thank you both so much.