Are you aware of HMRC’s Real Time Capital Gains Tax Service? Here’s everything you need to know about this government-run service and how Braceys can help you.
What is HMRC’s RT CGT Service?
HMRC has set up a “Real Time” Capital Gains Tax Service to help individuals report the disposal of certain assets which are subject to CGT. This avoids the need for that individual to register for Self Assessment if they would otherwise not be required to submit a tax return.
What can it be used for?
You can use the RT CGT Service to notify HMRC of any gains on shares or personal possessions. There’s an exception, however: you can’t use the service to report gains on UK property – there’s another service available specifically for this.
Types of gains you can report
The number of UK individuals investing in shares or investment portfolios has increased over the last few years. As a result, there are more individuals who will have gains to report, should they decide to cash in their investment.
You may need to pay CGT if you dispose of some or all of your investment at a profit. That includes shares which are not held in an ISA, units in a unit trust and certain types of bonds. It’s worth noting at this point that if you do sell and make a loss, you should keep a record of that loss. Why? Because you may be able to offset it against any future gains.
Gains on personal possessions
It’s not just shares and property that attract capital gains tax. For instance, you could be holding onto personal possessions such as jewellery, paintings, antiques or even coins and stamps which have a high market value. If you were to sell any of these possessions for more than £6,000, then you would also have to report any gain made to HMRC.
When do I have to tell HMRC by?
For gains which are not related to UK property, you have two options:
- Report using HMRC’s RT CGT service by 31st December following the tax year of disposal (so if your gain was on 31st March 2020, this falls in the tax year to 5th April 2020, therefore, you have to report it by 31st December 2020)
- Report via a self-assessment tax return by 31st January following the tax year of disposal
How do I report my gain through HMRC’s RT CGT service?
The first thing you should know is that agents (such as accountants) cannot do the submission on your behalf. That means you’ll need to have your own HMRC Government Gateway set up.
You then need to have all the details of the asset you disposed of to hand. That includes the original cost or acquisition price, costs incurred to buy and sell the asset and finally the proceeds you received on the sale.
You need to take this information and produce a document in PDF or JPEG format to attach to your report to HMRC. This document should show the details of the gain incurred along with what you think the tax payable is.
Once you’ve submitted your report to HMRC, you will receive an email notifying you of the submission along with a reference number. HMRC will then contact you confirming the amount of tax you have to pay, a payment reference and details on how you can make the payment.
How can Bracey’s help?
The calculation of a gain is not always straightforward. While it may seem as simple as ‘proceeds less costs’ there may be reliefs you are entitled to which can reduce the amount of tax you have to pay. You also need to consider any other income you have received in the tax year to determine what rate of CGT you need to pay.
At Bracey’s, we can gather the information needed from you and produce a capital gains tax report to be submitted to HMRC, ensuring that any reliefs you are entitled to are claimed and shown so you don’t miss out on these.
We won’t just prepare the report. We’re here to guide you every step of the way, including helping you to submit your report to HMRC using your Government Gateway login.