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HMRC have announced that they are to change the guidance in the Capital Gains manual where a private residence is occupied by dependent relative before 6th April 1988. A private residence occupied by a dependent relative before 6th April 1988 may qualify for capital gains tax (CGT) private residence relief. Guidance on this relief can currently be found in the Capital Gains manual at paragraph CG65550 onwards. Paragraph CG64718 currently explains that in such cases the further relief provided for by TCGA 1992, s 223(4), where the residence has also been wholly or partly let out as residential accommodation (‘lettings relief’) will not be due. This guidance is to be amended to reflect HMRC's change of view that lettings relief may be due. HMRC will also withdraw paragraph CG65562, which says that lettings relief is not due where private residence relief is due on a residence occupied by a dependent relative. Taxpayers wishing to amend their 2005/06 self-assessment returns based on this new guidance should do so by 31 January 2008. Taxpayers who have already filed their 2006/07 returns have until 31 January 2009 to amend their returns. If there is an open enquiry into a return and HMRC are able to amend it at the conclusion of the enquiry, they will amend it to reflect their current view. HMRC's previous published view was widely accepted. Therefore, if taxpayers are no longer able to amend their returns, it will not be possible to adopt the revised view for the tax year in question by making a claim for error or mistake relief (in accordance with TMA 1970, s 33) as the return will have been made in accordance with the practice generally prevailing at the time. Link |
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About The Author  Sarah Laing Sarah is a Chartered Tax Adviser. She has been writing professionally since joining CCH Editions in 1998 as a Senior Technical Editor, contributing to a range of highly regarded publications including the British Tax Reporter, Taxes - The Weekly Tax News, the Red & Green legislation volumes, Hardman's, International Tax Agreements and many others. She became Publishing Manager for the tax and accounting portfolio in 2001 and later went on to help run CCH Seminars (including ABG Courses and Conferences). Sarah originally worked for the Inland Revenue in Newbury and Swindon Tax Offices, before moving out into practice in 1991. She has worked for both small and Big 5 firms. She now works as a freelance author providing technical writing services for the tax and accountancy profession. |
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Article Added Thursday, 02 August 2007 | 1521 Hits |
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