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Property 30-day reporting issues

April 2020 saw the introduction of 30-day capital gains tax reporting and payment for disposals of UK residential property where the gain is not covered by the annual exemption, private residence relief, or losses arising before the date of disposal. The payment on account of the CGT due is by nature a best estimate at the payment date, as the applicable rate charged depends on the level of income in the tax year. In many cases, the actual level of income will not be known until after the tax year and so the gain is still reported on the self-assessment tax return with credit given for the payment made under the 30-day reporting regime.


However, where the initial payment was excessive it transpires that HMRC's self-assessment system will not offset the overpayment automatically. Affected taxpayers are advised to correct the initial 30-day return where this is possible before submitting a self-assessment tax return. This avoids the need for an offset in the first place. If a return has already been submitted, or if it is not possible to amend the 30-day return, the taxpayer (or their agent) will need to call HMRC to request that the overpayment is offset manually.


The ATT have published an FAQ document with responses from HMRC which can be read here that advisers should find useful. This document makes clear that, unless the initial payment was made using a card, a refund will have to be requested manually in almost all circumstances:


"No, the refund will not happen automatically. If the overpaid tax is the result of an amendment or due to a further UK Property Disposal return there is a section on the UK Property Disposal online return to request a repayment if one is due, this will prompt HMRC to review your client's record and repay any tax overpaid.


If the last payment on the UK Property Disposal return is made by card, then this will be how the refund is repaid. HMRC are currently reviewing the UK Property Disposal online service to add the option of notifying HMRC of bank details for repayment cases.


If a repayment is not requested, then any tax overpaid will remain as a credit on your clients UK Property Disposal account until you or your client contacts HMRC."


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