Payment of Capital Gains Tax

Up until April 2020, the date for payment of capital gains tax was 31 January after the end of the tax year (5th April) in which an asset subject to CGT was sold. But in April 2020 everything changed and new rules were introduced relating to the sale of properties.

You can read about the new rules on our dedicated Capital Gains Tax page here and about our CGT calculation service.

Provided you have sold something subject to CGT other than a property and you know the amount of the taxable gain and the amount of CGT payable, you still have almost ten months after the tax year end to accumulate the funds to pay the tax.

If you sold a property, then hopefully you were advised of the likely tax charge and reserved funds from the sale proceeds to settle the liability; after undertaking the necessary research – or professional advice – to claim any available exemptions or reliefs?

Payment of Capital Gains Tax – there is still time to consider CGT planning

It is beyond the scope of this article to list all the reliefs that can be claimed to reduce a CGT bill (please call for advice) but we can help you consider your options.

We will need to know the following details to better consider these options:

  • A description of the asset(s) you have sold
  • The disposal proceeds (what you received for them)
  • Any costs associated with the sale (auction fees etc)
  • The date you bought the asset you have sold and what it cost you originally
  • Any costs you have incurred since you bought the asset that have improved it in some way: for example, the costs of extending a property.

If you don’t submit an annual tax return, you will need to submit details to HMRC using the “real time” Capital Gains Tax service.

The following instructions on this option are reproduced below.

However, even if you use this option, it is still advisable to take professional advice on the computation of the chargeable gain to ensure you only pay what is due and no more.

You can use the ‘real time’ Capital Gains Tax service if you’re a UK resident.

You’ll need a Government Gateway user ID and password. If you do not have a user ID, you can create one when you report and pay. When you use the service, you’ll need to upload PDF or JPG files showing how your capital gains and Capital Gains Tax were calculated.

When to report

You can use this service as soon as you’ve calculated your gains and the tax you owe. Gains on sales of properties must be reported and tax paid within 60 days of completion date. Otherwise you must report by 31 December following the end of the tax year in which you had the gains.

After you’ve reported your gains, HMRC will send you a letter or email giving you a payment reference number and telling you ways to pay.

Do not pay your Capital Gains Tax bill until you’ve received your payment reference number.

CGT planning

Talk to our Chartered Accountants here at THP to find out how we can help. We have offices in ChelmsfordSuttonWanstead, and Saffron Walden.

Need further advice on any of the topics being discussed? Get in touch and see how we can help.

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    Avatar for Karen Jones
    About Karen Jones

    Having worked for one of the world’s largest accountancy firms, Karen Jones uses her tax knowledge and skills to help clients obtain substantial reductions to their tax liabilities.

    With an expanding portfolio of tax clients, Karen enjoys the variety her work brings her and particularly likes working with new businesses and people. With a growing number of tax clients, she frequently faces a variety of challenges and relishes the experience she gains as she solves them.

    Karen likes the THP ethos: “I like the way the team has a professional, but friendly and down-to-earth approach – it creates a productive atmosphere that benefits everyone.”

    Karen’s specialist skills:

    • Personal Taxation
    • Tax Efficient Planning
    • Trust Administration
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