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Where Taxpayers and Advisers Meet

CGT and self assessment questions...confused!

Joined:Tue Dec 07, 2021 3:22 pm
CGT and self assessment questions...confused!

Postby lecomputer » Tue Dec 07, 2021 3:24 pm

Hi, apologies in advance for any silly questions

I am registered to fill in a self assessment tax return, for years the only section I'd fill out was from renting my property as I was working in Asia. I came back at the start of lockdown and have been renovating my house for 2 years, with no income from anything. I am now looking at filling out my 2020/2021 tax return. When I go to the website to fill it in, I clicked 'Do I need to fill out a tax return', and answer all the questions to which it says I do not need to fill one out.

But then I got an email after logging in saying :
"Our records show that you’ll need to send us your Self Assessment tax return and pay any tax you owe by 31‌‌ ‌January 2022.
You’ll still need to submit a return even if you don’t owe any tax."

So I'm a bit confused, do I or don't I need to submit one if I didn't make any money? I just had lots of tax deductible expenses from fixing my house up.

And a second confusing matter. I bought cryptocurrency in 2018 just before the crash and lost a lot (on paper) and from terrible trades and decisions. I didnt realise every crypto trade was a taxable event, it wasn't clear back then. Now it seems I have quite substantial losses from 2018/2019. It says on the HMRC website you can claim Capital Gains Losses up to 4 years after disposing of the assets, and then use those losses to offset any future gains. So of course I'd like to do this. I'm just confused, do I do that on this years tax return? Or do I have to fill out a tax return for 2018, and if so how do you fill out a return for a past year? I had already submitted tax returns for those years, and at the time had no idea of the rules for Cryptocurrency so didnt include anything, will this be a problem?

Sorry if any of this is confusing, I'm confused!

thanks in advance

Joined:Sat Feb 01, 2014 3:26 pm

Re: CGT and self assessment questions...confused!

Postby bd6759 » Thu Dec 09, 2021 10:15 am

The only people who need to fill out a tax return are those who been given notice to do so. The guidance on explains the criteria by which HMRC decide who should be given notice. You must complete a return if you have been given notice, unless you can persuade HMRC to withdraw it.

The reduction in value of an asset that gives a notional loss is not a disposal, so has no CGT implications. Actual disposals will generate loses and/or gains. But since you were not resident these losses will not be allowable losses. A loss would only be an allowable loss if you would have been liable to UK tax had you made a gain rather than a loss.

Joined:Wed Sep 09, 2020 5:12 pm

Re: CGT and self assessment questions...confused!

Postby iwmtaxadvisor » Thu Dec 09, 2021 2:30 pm

If I might offer another opinion, "taxpayers who do not receive a tax return are required to notify chargeability to income tax or capital gains tax"

There is a requirement to notify HMRC if there is a tax liability. In effect, everybody has to collect the data, compute a liability or repayment and then decide if they have to complete a Return.

HMRC were told to soft pedal this so that the MPs do not get letters of complaint. After a few decades of trying to reconcile the conflict, HMRC are moving strongly towards collecting all data digitally and then being able to identify and penalise those who don't comply.
Robert Noble-Warren CTA, FCIS
wealth updates for high net worth families

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