30 Day CGT reporting and payment requirement:
The new ‘UK property Reporting Service’ must be used where UK residential property is disposed of after 6 April 2020. This appendix is designed to set out a guide on the practical reporting process of this new feature.
The service is designed to be used by UK resident and non-resident individuals but this appendix focuses mainly on the reporting requirements for UK residents.
· From April 2020 any UK resident who disposes of UK residential property and has CGT to pay now has a requirement to calculate, report and pay the tax due within 30 days of completion. The report is made online using the UK Property Reporting Service as set out in Schedule 2 Finance Act 2019.
· As agents, we can calculate and report this to HMRC on your behalf, but our standard Agent Authorisation does not cover this service and we must therefore be specifically authorised by you for the UK Property Reporting Service.
· As the new service is a digital only service, HMRC require us, as agents, to carry out a ‘Digital Handshake’ with our clients, in order to become authorised to use the UK Property Reporting Service.
Step by step guide to Authorising Your Agent
Step 1: Create a Capital Gains Tax on UK Property account:
Please note the Capital Gains Tax on UK Property account is an entirely separate account to the individual ‘Personal Tax Account’ you may already have, and cannot be activated from within the Personal Tax Account.
If you already have a ‘Personal Tax Account’ set up with HMRC, you can use the same credentials (username and password) to create your Property account. If you prefer, however, you can create a separate set of credentials specifically for this individual account.
Set up a Government Gateway Account
To do this visit https://www.tax.service.gov.uk/capital-gains-tax-uk-property/start
Click ‘Create Sign In Details’.
Follow the on-screen instructions to set up a username and password.
Make a note of your unique Username and Password.
The visit the link above and input your username and password into the appropriate boxes.
This will then begin the process of activating your Capital Gains Tax on UK Property account. Creation of the property account should typically take less than 5 minutes once the Government Gateway account has been created using the process above.
At the end of the process of creating the Capital Gains Tax on UK Property account you will be provided with a reference number for your property account. This is likely to be a 15-digit number in the format ABCGTXXXXXXXXXX or similar. Please make a note of this reference number as it will be needed in future steps.
Step 2 – Tell Your Agent
Once you have created the CGT UK Property Account please send us a note of the 15-digit reference number and the postcode used for setting up the account.
Step 3 – Agent Authorisation
We will provide you with a timed (usually 7-14 days) authorisation link by email, which will authorize us to manage the CGT UK Property account ONLY on your behalf.
Step 4 – Taxpayer Authorises Agent
When the authorisation link (from step 3) has been received, please use this link before it expires. When you access the link you will be required to enter the credentials created at Step 1.
Once your authorisation has been confirmed, we will receive an email confirmation to confirm your acceptance.
From this point onwards we should now have access as your agents to the CGT UK Property account and will file the return on your behalf.
Once filed, you will receive an email from HMRC to confirm successful filing, and will be given details of how to make payment of the CGT due. The payment can be made by credit/debit card or bank transfer by logging into your account.
Please note, the process above applies in all cases, however, HMRC have specifically stated that those who consider themselves as ‘digitally excluded’, can use a different process and file a paper return. The definition provided by HMRC of someone who is digitally excluded is:
‘completely unable to appoint HMRC online or manage their own Property Account due to age, disability, remoteness of location or for any other reason, including religious beliefs.’
If you believe that you fall into the ‘digitally excluded’ category, please contact us for further guidance. However, being digitally excluded does not exempt an individual from the 30-day reporting and payment requirements.
Don’t hesitate to contact us if you have any questions.