HELP !!! I did not realise I had to register my captial gains tax within 30 days

[just wondering]

Okay, I am self-employed / self assessment, totally messed up, my mistake, sold my property April 25th 2021, just realized today due to Google, that I should have registered the sale and paid the tax...

So hands up, I have done wrong...looking for some advice, currently around 8 months late on declaring the sale, I am wondering how much late penalty I will pay the HMRC site suggests £300

The property sold was my sole property, no other property owned, since letting out the place, I have lived in rented accommodation.

Rough figures (please forgive my rough calculations)

owned the property for 290 months(purchased 1997), rented out for 129 months from 2010 (already taken into account the 9-month period)

Property purchase price 34,500 (need to figure out buying costs).

Sold price after solicitor and estate agent fees £143,000

= £108,500 profit before allowing for the tax relief from my time living at the property.

my rough calculation suggestions £49.500 profit after tax relief

capital gains allowance £12300 (fairly low income of £15000 self-employed)

£49500 - 12300 = £37200 , 18 percent tax = around £6690

Plus a few other questions

I bought the property before I was married, when I sold the property it was in my name only (married around 5 years at the time) can I still use my wife's CGT allowance against the sale? my wifes name was never added to the deeds, her salary is around £20k a year.

Also, in 2019 I put a new roof on the property £6600 and whilst preparing the property for sale in 2020, required new bathroom, new oven and various work to make the property in a saleable condition for the market, new carpets, decorated, the electric consumer box was replaced, plus labour costs for work around the house.

When I bought the property back in 1997, I had new windows fitted, central heating, re-wired, chimney removed, I presume those costs cannot go against CGT!?!?

Which of the above can I claim for against the CGT ?

[JK0]

I think you should talk to an accountant to get chapter & verse. I think he will be able to arrange things so you don't pay any CGT at all.

[jpkeates]

I bought the property before I was married, when I sold the property it was in my name only (married around 5 years at the time) can I still use my wife's CGT allowance against the sale?

Not unless she owned any of it.

Also, in 2019 I put a new roof on the property £6600 and whilst preparing the property for sale in 2020, required new bathroom, new oven and various work to make the property in a saleable condition for the market, new carpets, decorated, the electric consumer box was replaced, plus labour costs for work around the house.

When I bought the property back in 1997, I had new windows fitted, central heating, re-wired, chimney removed, I presume those costs cannot go against CGT!?!?

If they affected the value of the property and haven't been used against other tax, they can.
Things that are maintenance, like re-wiring probably should have been claimed against income.[/QUOTE]

[just wondering]

I think you should talk to an accountant to get chapter & verse. I think he will be able to arrange things so you don't pay any CGT at all.

Hi Thank you for your reply, please could you give me a few more clues, as to how I would not have to pay any CGT ?

[just wondering]

Not unless she owned any of it.

If they affected the value of the property and haven't been used against other tax, they can.
Things that are maintenance, like re-wiring probably should have been claimed against income.

Okay, so new bathroom, new roof, central heating, double glazing , new kitchen, new bathroom, they have not been claimed for at any other time, but some of that work was carried out in 1997 / 1998, I no longer have the receipts for the work, will HMRC allow a guess on the costs? Windows were around £3000, central heating around £1800, later work such as new bathroom, around £1200, new roof around £6000 ish I have receipts for.

[just wondering]

Does anyone know how much of a late fee I am likely to pay ? With me been around 10 months late?

[JK0]

Hi Thank you for your reply, please could you give me a few more clues, as to how I would not have to pay any CGT ?

I'd look back at old bank statements and cheque stubs to find the costs of all the jobs you've done over the years. I think they must be more than £37k. If there is no CGT to pay, I'd have thought there should be no penalty.

[just wondering]

Okay, I have been burning the midnight oil, based on the property been sold April 25th 2021, I had 30 days to notify HMRC and pay the CGT, so currently I am around 9 months late, based on the links below to the HMRC website that detail, the fine and that I would need to pay interest also.

So capital gain £6690

Penalties
£100 for up to six late
beyond 6 months additional 5 % tax of the CGT outstanding £6690 = £334.50
Then the interest rate at 2.6 percent (I presume of the total amount including penalities) interest charged around £155 (based on 10 months of interest)

so my fine should come to around £589.50

I presume when the form is filled out online for the capital gains tax, the fine will be calculated at the same time ? Or will I be sent a separate bill?

Info below used to roughly calculate the potential penalty amount

HMRC penalty interest rate of 2.6 percent

https://www.gov.uk/government/public...ptember%202009

Late charges

https://www.gov.uk/guidance/capital-...20is%20greater

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

[Section20z]

Personally I would register and file for CGT now (the limit is now 60 days) so they have your calculations, and then file the voluntary disclosure form with your offer of penalty. If you do it without prompting then the penalties are less , and are all explained on the website.

[theartfullodger]

For the benefit of anyone selling since 27th October 2021 it's now 60 days...
https://www.gov.uk/capital-gains-tax...ital-gains-tax

If you sold property in the UK on or after 6 April 2020


You must report and pay any tax due on UK residential property using a Capital Gains Tax on UK property account. You must do this within:

• 60 days of selling the property if the completion date was on or after 27 October 2021
• 30 days of selling the property if the completion date was between 6 April 2020 and 26 October 2021

You may have to pay interest and a penalty if you do not report and pay on time.

Hopefully selling (completing)this month or next,

[Gordon999]

If you do the annual tax return online before 31 Jan ( now allowed to 28 Feb 2022) , report your capital gain £49K less those refurb costs before sale.

[just wondering]

Personally I would register and file for CGT now (the limit is now 60 days) so they have your calculations, and then file the voluntary disclosure form with your offer of penalty. If you do it without prompting then the penalties are less , and are all explained on the website.

Hi, thank you all for your very helpful replies.

I shall definitely use the voluntary disclosure form, any idea how much do they reduce the fine by?

[just wondering]

If you do the annual tax return online before 31 Jan ( now allowed to 28 Feb 2022) , report your capital gain £49K less those refurb costs before sale.

Hi, thank you, I have already paid for 2020 / 2021, the property sold in the next tax year on April the 25th 2021, so I believe the capital gain would be for the year 2021 to 2022 (even though I was ment to pay the CGT 30 days after completing on April the 25th 2021) ... Which I can file from April the 6th 2022, I am self assessment

I am hoping I'm not wrong, as I guess I will have made another mistake.

[Section20z]

Hi, thank you all for your very helpful replies.

I shall definitely use the voluntary disclosure form, any idea how much do they reduce the fine by?

There's different levels depending which box you tick as your reason for late filing, they might accept an offer of 19.5% penalty + 2.5% interest , but knock off all your capital expenses and my guess is your total will be less than the £6690 you estimated. Slip it in before the 31st Jan while they're snowed under would be my suggestion 😁

[just wondering]

With regard to claiming against capital gains tax for the things from up to 24 years ago that I no longer have receipts for, such as fitting central heating, fees for buying the property (solicitor, survey costs, no stamp duty paid due to been below stamp duty level), I had a large area of the garden patio'ed and a new wall built to divide off part of the garden.

Although I did pay for all those things, I presume it would be madness to include them as costs, as I cannot prove how much I paid and when I paid, but the sticking point been that they are purchases from between 24 and 14 years ago, I guess I would no longer be required to have kept the receipts for the work carried out....plus at the time, I had no intention of renting out the property some 13 or so years later.

I do have receipts for more recent things, new bathroom, re-tiled the roof, new electric consumer box, fitting costs.