Capital Gains Tax

BungalowBel

Hi there, we recently sold a flat that we had been renting out and had to pay CGT.  I was unsure how to do this, as our self-assessment forms were for 2023-24 tax year and the Gain was made in 2024-25.  But it also says it has to be paid within 90 days of making the gain.

Anyway, I worked out how much we owed, using the Government Calculator, and sent a cheque off with the appropriate form, with our 2023-24 Self-assessment forms.  I clearly marked  the CGT  form 'tax year 2024-25' and posted it all off together, still not sure whether I had done it correctly.

Today I noticed that the cheques had been cashed.

Can someone who knows more than me tell me if I can assume I have done it correctly and they have accepted the payment as correct, even though it is for 2024-25?  It is preying so much on my mind!

Bookworm105

you appear very confused.

CGT must be declared and paid within 60 days (not 90) of the completion date of the property sale
Report and pay your Capital Gains Tax: If you sold a property in the UK on or after 6 April 2020 - GOV.UK (www.gov.uk)

you have already acknowledged that you have a CGT liability arising during 24/25, therefore you are required to submit a 24/25 self assessment tax return. You will therefore declare the gains calculation on your tax return, along with all other sources of income in 24/25.
The tax return will therefore calculate what your actual tax position was as at 5th April 25. That may, or may not, result in you owning further tax for 24/25 once your higher rate threshold for 24/25 has been established and therefore the higher rate CGT has been confirmed and matched against what you have already paid  

BungalowBel

I AM very confused!

The cause of the confusion was that the gain arose in the 24-25 tax year but has to be reported within 60 days (I did know that, don't know why I put 90).

If I had left it until I have to do the 24-25 return,(which I can't do yet, as that tax year has not finished yet) that would have been more than 60 days.

That is what I find confusing.

Therefore I thought to be on the safe side, I would send it in now.

Will I have to report it again in 2024-25?  They have cashed our cheques already!

Thanks for your reply.

Bookworm105

blimey

(completion) date of sale was...
on / before 5 April 2024 = declare in 23/24 tax year tax retrun 
on / before 5 April 2025 = declare in 24/25 tax year tax return

pumas

If you reported within 60 days, you've done what is required, now a waiting game!

BungalowBel

pumas said:

If you reported within 60 days, you've done what is required, now a waiting game!

Thank you so much.  What do I have to wait for?

Bookworm105

pumas said:

If you reported within 60 days, you've done what is required, now a waiting game!

incorrect, given this was a rental property they are, in addition, also required to report on an SA tax return 
Capital gains tax reporting | Low Incomes Tax Reform Group (litrg.org.uk)

BungalowBel

The gain was made in September 2024.  If I wait until April 6th 2025 to declare it, that is more than 60 days.

That is where I have got confused.

I am sorry to be such a pain.  I have done simple SA forms for years, but have never done CGT before.  I am almost 75  and perhaps not as au fait with these things as I would have been when younger.

Thank you for your replies.

Bookworm105

BungalowBel said:

The gain was made in September 2024.  If I wait until April 6th 2025 to declare it, that is more than 60 days.

That is where I have got confused.

I am sorry to be such a pain.  I have done simple SA forms for years, but have never done CGT before.  I am almost 75  and perhaps not as au fait with these things as I would have been when younger.

Thank you for your replies.

as you are already within annual SA there are 2 stages you MUST undertake:

1. declare and PAY CGT under the 60 day declaration process
Report and pay your Capital Gains Tax: If you sold a property in the UK on or after 6 April 2020 - GOV.UK (www.gov.uk)

2. declare your CGT under the normal SA process for 24/25 (gain arose in sept 24) and pay any extra CGT due on / before 31 Jan 2026. In practical terms that means you won't be able to submit the 24/25 tax return until mid/late April 2025 so will not know if you have any excess to pay until then as the CGT higher rate threshold will not be known with certainty until you have declared your entre income for 24/25 on your 24/25 return .

BungalowBel

Bookworm105 said:

BungalowBel said:

The gain was made in September 2024.  If I wait until April 6th 2025 to declare it, that is more than 60 days.

That is where I have got confused.

I am sorry to be such a pain.  I have done simple SA forms for years, but have never done CGT before.  I am almost 75  and perhaps not as au fait with these things as I would have been when younger.

Thank you for your replies.

as you are already within annual SA there are 2 stages you MUST undertake:

1. declare and PAY CGT under the 60 day declaration process
Report and pay your Capital Gains Tax: If you sold a property in the UK on or after 6 April 2020 - GOV.UK (www.gov.uk)

2. declare your CGT under the normal SA process for 24/25 (gain arose in sept 24) and pay any extra CGT due on / before 31 Jan 2026. In practical terms that means you won't be able to submit the 24/25 tax return until mid/late April 2025 so will not know if you have any excess to pay until then as the CGT higher rate threshold will not be known with certainty until you have declared your entre income for 24/25 on your 24/25 return .

Thank you so much, I think I understand now.

I have done step 1. 

I presume there is a space on the CGT page for self-assessment where I can put that we have already paid £xxx?  I don't think we will have to pay any more.  My husband's income is about £25k and unlikely to change much, mine is (now we don't have the rent from the flat) below the tax threshold.

That is assuming the rules don't change before then!

Thank you so much for your help.