New 30 day CGT regime for residential property disposals PART 3 OF 3

Amending the Return

Where the capital gains tax UK property disposals return is later found to be incorrect, it is possible to submit an amendment, but this cannot be amended online. Instead, you are recommended to contact HMRC.

The capital gains tax UK property disposals return cannot be amended once the self assessment tax return for that year has been filed. This is because the disposal of UK land should also be reported on the self assessment tax return and, once that has been filed, it would be unnecessary to amend both of these returns; only the SA return should be amended.

FA 2019, Sch 2, Part 2, para 19(3
)

Overpayment or underpayment of tax

Where the amount of the gain reported or the amount of the tax paid proves to be incorrect, the taxpayer can amend the 30 day return, provided the amendment relates to matters that occurred on or before the completion date for the disposal.

Where further tax is due in respect of the disposal, it is recommended that the return be amended and the extra tax paid to HMRC as soon as the taxpayer becomes aware of the error.

Alternatively, if there is a later disposal of UK land in the same tax year and the taxpayer overpaid tax in relation to the earlier disposal, the calculation of tax due on the later disposal can be reduced by the amount of the tax overpaid. This means the overpaid tax can be relieved in-year, rather than waiting until after the end of the tax year to file a self assessment tax return.

FA 2019, Sch 2, Part 1, para 8

Interest and penalties

Interest will apply to any amount of the capital gains tax that remains underpaid at the 30-day deadline. Interest runs from the normal due date for payment to the day before payment is actually received by HMRC.

FA 2019, Sch 2, Part 3, para 31; FA 2009, s 101(3), (4)

Late filing penalties

The harmonised penalty regime in FA 2009, Sch 55 applies.

The penalties are: 

(a) fixed penalty of £100 if the capital gains tax UK property disposals return is filed late,

(b) daily penalties of £10 per day once the return is three months late, and

(c) tax-geared penalties of 5% of the liability or £300 if higher after the return is six months or 12 months late.

In practice, the penalties will be retrospectively issued as it is likely that HMRC will only be made aware of the disposal when the capital gains tax UK property disposals return is filed.

Late payment penalties

The harmonised penalty regime in FA 2009, Sch 56 applies.

Broadly, the penalties are 5% of the tax outstanding from the day after:

(a) 30 days after the 31 January after the end of the tax year,

(b) five months after the first penalty date (ie approximately six months from 31 January), and

(c) 11 months after the first penalty date (ie approximately 12 months from 31 January).

As always, feel free to contact me should you require any further information/clarification! :)

About author

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Omar Aswat
Tax Adviser