Capital Gains Tax Installment Interest

lapwing_sky

Hello, 

I hope somebody here can help, as I have searched the internet but not been able to find an answer. 

I am aware than under certain circumstances, it is possible to elect to pay capital gains tax in 10 annual installments. I can't post a link but the details can be found under 'CG66452 - Reliefs: Capital Gains Tax and Gifts: Chargeable Gifts: Liability Paid in Instalments'  

Under this provision, it mentions the following;

"If a valid election is made then the tax is paid by ten equal yearly instalments, the first of which is due on the day the tax would otherwise have been payable, subject to the following:

• Interest will run from the normal due date and interest on the unpaid portion of the tax will be added to each instalment.
• The outstanding tax can be repaid at any time with interest to the date of payment.

• The outstanding tax with interest to the date of payment is to become due and payable immediately where assets

• which were given to a connected person"

I have not been able to find out what this rate of interest is however (I appreciate it would probably change depending on the BOE base rate), but what is it now? Does anyone know? 

Cheers

Bookworm105

as far as i know it is treated the same as a "time to pay" instalment plan and therefore is treated as "late" payment of tax
HMRC interest rates for late and early payments - GOV.UK (www.gov.uk)

lapwing_sky

Thanks, but which one of those would it fall under? 

Would it be classed as a late payment even when the payment by installments is agreed? 

lapwing_sky

Just seen your edit, which answered my follow up question. Cheers 

Dazed_and_C0nfused

Having a TTP arrangement simply means HMRC don't send the boys (or girls) round to get the money.  And if made before the due date you can avoid late payment penalties.

But interest is charged as it would be for any other late payment.

The rate for Capital Gains tax (7.5%) is included here,

https://www.gov.uk/government/publications/rates-and-allowances-hmrc-interest-rates-for-late-and-early-payments/rates-and-allowances-hmrc-interest-rates#income-tax-national-insurance-contributions-capital-gains-tax-stamp-duty-land-tax-stamp-duty-stamp-duty-reserve-tax-from-1-october-1999-and-vat-for-periods-starting-on-or-after-1-january-2023