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Where Taxpayers and Advisers Meet

CGT late reporting penalties - worth paying?

bustaneardrum
Posts:3
Joined:Mon Sep 04, 2017 9:40 am
CGT late reporting penalties - worth paying?

Postby bustaneardrum » Wed Jun 08, 2022 1:43 pm

Good Afternoon,

I finally sold my BTL property yesterday (it took 12 months....) - I am fully aware I have 60 days to report my CGT without incurring any penalties and that i need to report it for myself and my wife as owned jointly.

According to HMRC website if I miss the 60 day deadline by up to 6 months I would get a penalty of £100.

So accepting it would cost me 2 x £100 fines (joint ownership) does this technically mean I would have 60 days plus 6 months to submit?

I only ask as there are possible short term investments available that would / may (can go up as well as down) return in excess of the £200 penalty over a period of 6 months and on the face of it would seem beneficial to effectively pay the 200 to delay my CGT payment.

Penalties
You have 60 days from the date of conveyance to report your disposal and pay any tax due. You’ll get a late filing penalty and be charged interest if you do not do this by the 60-day deadline.

If you miss the deadline by:

up to 6 months, you will get a penalty of £100

more than 6 months, a further penalty of £300 or 5% of any tax due, whichever is greater
more than 12 months, a further penalty of £300 or 5% of any tax due, whichever is greater

Any and all views welcome - thanks in advance! (and apols if previously asked)

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: CGT late reporting penalties - worth paying?

Postby robbob » Wed Jun 08, 2022 2:39 pm

late payment interest will be added too - you are barking mad (IMHO feel free to disagree) if you choose to delay submission for reasons outlined. Note no submision needed if no tax to pay.

bustaneardrum
Posts:3
Joined:Mon Sep 04, 2017 9:40 am

Re: CGT late reporting penalties - worth paying?

Postby bustaneardrum » Wed Jun 08, 2022 3:36 pm

Lol - appreciate the feedback!

Very much depends on the investment opportunity risk / reward ratio............

Thankyou for responding though - I defo had some mind fog about the £100 PLUS the HMRC interest rate (currently at 3.5% by the looks of it)

Every days a school day as they say!

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: CGT late reporting penalties - worth paying?

Postby Jholm » Wed Jun 08, 2022 4:05 pm

The purpose of the 60 day account is to generally provide an estimate as to the tax payable and to pay it on account. Once the tax year is over, you then adjust to include other CGT items post-disposal, other reliefs etc and either claim the overpayment or settle the additional tax.

HMRC guidance stated that as long as it is marked as an estimate, interest won't be charged if further CGT is due upon full reconciliation after the end of the tax year.

Seems better an option that just accepting penalties/interest, which also could stand to be used against you in the event of a future appeal for other purposes. Unlikely but possible.


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