Capital Gains Tax and Self-assessment: sale declared twice?

Robin50

Hello all. 

My partner sold her house last year and did all the sums to estimate the CGT (I am helping her to deal with it).  She declared the gain online and got the same estimate of CGT from the HMRC website, which she paid immediately.  In her SA declaration for 2022/23 (submitted August 2023) she completed the additional form SA108 with the same figures for the capital gain.

When she received the HMRC Tax Calculation in September it said she still owed CGT (payable before Jan 31 2024).  BUT the "new" estimate for the capital gain is exactly TWICE what she declared, and the amount of CGT that the Tax Calculation says she has already paid is exactly TWICE what she actually paid.

She immediately wrote a letter to HMRC (Oct 2nd) with these details.  There was no reply and in December she phoned the SA helpline who acknowledged receipt of the letter but said it would be dealt with in February. When we pointed out that the deadline for paying was the end of January, she passed it to the "Technical Dept" and said we would hear within 6 days.  But so far, no reply.  The SA helpline seems to be closed now until after Jan 31.

What we surmise has happened is that the figures (for everything) have been registered twice - once in the online CGT declaration and once in the SA108 form: but obviously there was only 1 sale of 1 house.

We don't know what to do now.  It seems in everyone's interest (HMRC and my partner) that this is settled before the end of January otherwise there is going to be a lot of extra work to get a refund of overpaid tax.  But what action can we take?  Can we withhold the SA calculation on the grounds that our letter is waiting to be dealt with?  Would we still be fined and have interest to pay?

Help please! and Thanks in advance.

ProDave

I have just sold a property and last week declared the capital gain.

I DON'T expect to be including this on my end of year self assesment as it has already been declared.

km1500

yes you do have to declare it on self assessment even though you have reported it and paid any CGT

this is because when you report it you did an estimate of your other income and when you do a self-assessment you will put the exact figures for your income and therefore the cgt will be recalculated

ProDave

km1500 said:

yes you do have to declare it on self assessment even though you have reported it and paid any CGT

this is because when you report it you did an estimate of your other income and when you do a self-assessment you will put the exact figures for your income and therefore the cgt will be recalculated

Ah, so did the OP under estimate their income?  If they estimated it withing the basic rate, and the actual income pushed them into higher rate tax, the CGT due would go up A LOT.

theartfullodger

ProDave said:

I have just sold a property and last week declared the capital gain.

I DON'T expect to be including this on my end of year self assesment as it has already been declared.

Yes you do.  You may have other CGT transactions or liabilities (eg shares).  I've had to do so twice in recent years .

But please feel free to ignore HMRC's processes and procedures.

km1500

ProDave said:

km1500 said:

yes you do have to declare it on self assessment even though you have reported it and paid any CGT

this is because when you report it you did an estimate of your other income and when you do a self-assessment you will put the exact figures for your income and therefore the cgt will be recalculated

Ah, so did the OP under estimate their income?  If they estimated it withing the basic rate, and the actual income pushed them into higher rate tax, the CGT due would go up A LOT.

can't say if they underestimated their income but I do know you have to put a figure in for your income when you first do it after the sale and this may or may not match the actual income when you come to doing your tax return at the end of the year. 

sheramber

Robin50 said:

Hello all. 

My partner sold her house last year and did all the sums to estimate the CGT (I am helping her to deal with it).  She declared the gain online and got the same estimate of CGT from the HMRC website, which she paid immediately.  In her SA declaration for 2022/23 (submitted August 2023) she completed the additional form SA108 with the same figures for the capital gain.

When she received the HMRC Tax Calculation in September it said she still owed CGT (payable before Jan 31 2024).  BUT the "new" estimate for the capital gain is exactly TWICE what she declared, and the amount of CGT that the Tax Calculation says she has already paid is exactly TWICE what she actually paid.

She immediately wrote a letter to HMRC (Oct 2nd) with these details.  There was no reply and in December she phoned the SA helpline who acknowledged receipt of the letter but said it would be dealt with in February. When we pointed out that the deadline for paying was the end of January, she passed it to the "Technical Dept" and said we would hear within 6 days.  But so far, no reply.  The SA helpline seems to be closed now until after Jan 31.

What we surmise has happened is that the figures (for everything) have been registered twice - once in the online CGT declaration and once in the SA108 form: but obviously there was only 1 sale of 1 house.

We don't know what to do now.  It seems in everyone's interest (HMRC and my partner) that this is settled before the end of January otherwise there is going to be a lot of extra work to get a refund of overpaid tax.  But what action can we take?  Can we withhold the SA calculation on the grounds that our letter is waiting to be dealt with?  Would we still be fined and have interest to pay?

Help please! and Thanks in advance.

It appers you have ente4red the details incorrectly on the SA108 if  HMRC think you disposed of two properties. 

I suggest you post in the cutting tax forum giving details of what figures you entered in what boxes on the SA108.

Someone there should be able to help you.

fisher66

When you fill in the SA form, there is a box to let you fill in any CGT you have already declared and paid on the interim property sale CGT form. When this is then taken off in the CGT calculation then the amount you owe should net to 0 unless there has been a change in your income or other asset disposals to cause a change to the CGT owed.

Robin50

Hello All, and thank you for your comments; sorry I wasn't around yesterday to reply more quickly.  On the question of "other income" it was zero in both cases: we are not resident in the UK and our other income is taxed in our country of residence.  Selling the property in the UK was part of "tidying up" our affairs.  It's quite possible we didn't enter the details correctly on the SA108 and I'll go over that (yet) again.  If we make any progress, I'll report back.

Robin50

Thank you for pointing me to possible errors in the SA108 - that was indeed the source of the problem, and it was our mistake.  It's odd sometimes how everything looks correct until someone questions it, then suddenly the "scales fall from the eyes" and you think "How could I have made such a stupid mistake?".  Well, you live and learn, I suppose.

Managed to get through to HMRC after a couple of long, long waits but then it was sorted out in a few minutes.  The infrastructure of HMRC might be collapsing, but I must say I've always found the people who deal with problems (once you get through to them) are knowledgeable, helpful and efficient.  This time was no exception, so thanks to them as well. 

theartfullodger

Robin50 said:

..............

Managed to get through to HMRC after a couple of long, long waits but then it was sorted out in a few minutes.  The infrastructure of HMRC might be collapsing, but I must say I've always found the people who deal with problems (once you get through to them) are knowledgeable, helpful and efficient.  This time was no exception, so thanks to them as well. 

Indeed: It's those in charge (the government ..) that's the issue