CGT – I “want” to pay, but how?

by Readers Question

16:11 PM, 11th June 2020
About 2 months ago

CGT – I “want” to pay, but how?

Make Text Bigger
CGT – I “want” to pay, but how?

I seem to be caught between two systems. I sold a property in February 2020 and made a small loss. I sold another in May 2020 and made a gain which is not completely cancelled out by the previous loss plus my allowance.

I need to pay some CGT but with the recent change in reporting and payment requirements, I cannot work out how!

The HMRC CGT calculator asks “In the 2020/21 tax year, what was your income?” but as we are not at the end of 20/21 tax year yet, how can I possibly know? This very much depends on whether tenants pay all their rent (difficult to predict even in non Covid times) and whether I have any void periods.

I have phoned HMRC and someone should phone me back by June 16th……..but given the run around of departments I was given this morning, I am not hopeful that the call will come from someone who knows the answer.

I thought I read somewhere that the requirement to pay within 31 days had been extended but cannot now find that info.

I am really hoping that someone on here might know the answers to this.

Many thanks

DougalBid



Comments

Pippa Watson

13:22 PM, 12th June 2020
About 2 months ago

In the same boat, I know I will be LRT but have not been in previous years. Haven't read about the delay they have offered, doesn't seem to appear when I have started the process, only have another 13 days to complete it. Would be keen to hear how it has worked for anyone else.

Martin McDonagh

17:18 PM, 12th June 2020
About 2 months ago

I had a similar issue, but fortunately got through to a very help guy at HMRC. He told me to enter my best guess for income for the year, and any adjustments would be made when I submit my 2020-2021 tax return in Jan 2022.
If you expect to pay income tax at 40%, I think the estimate does not need to be that accurate - you will pay CGT all at 28%.
If you expect to pay income tax at both 20% and 40%, I'll leave you to work out whether to estimate higher or lower.
Following the question on "estimated income", is a question asking if any of the figures are estimates ! Clearly they will be. The HMRC guy I spoke to said this really meant "were any of the Capital Gains figures estimates".
I did find the extension because of Covid - there is an extra month.
All the above is my personal view as a fellow unqualified landlord.

silversurfer2017

21:28 PM, 12th June 2020
About 2 months ago

I would suggest that you estimate your income on the low side for 20/21 so that you only pay CGT, on account, at 18%. If your income works out higher than your estimate then just pay them the extra 10% on part or all of the gain in 2022. This is what I intend to do on a property I am currently selling, fingers crossed. It is so early in the tax year I cannot be certain of what my income will be for the whole of the 20-21 tax year.


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

How To Re-Purpose Defunct Commercial Buildings

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More