CGT return – Have I got this right and can I use paper?

Hi Jackie

The Capital Gain will be added to your income for the year.

There are 2 rates of CGT on the sale of a property, 18% and 28%, depending on your income levels and an annual allowance of £12,300 which is tax free.

Your gain is £54,000.
Reduce the gain by the annual allowance of £12,300, resulting in £41,700 which is taxable.

You will pay the lower rate on the gain up until the higher rate tax threshold (£50,207), and the higher rate after that.

As your income is £20,000 for the year then £30,207(£50,207 less £20,000) of the gain will be payable at 18%.
The remainder of the gain, £11,493 (£41,700 less £30,207), at the 28% rate.

Please see the link below

https://www.gov.uk/government/publications/self-assessment-capital-gains-summary-sa108

to submit with your TR, section 108

Hope that helps

Nicky Kita
Property118 consultant

If you are already in the self-assessment system you will also have to enter the details in your 2022/23 return.
You can submit on paper but will have to call HMRC on 0300 200 3310 to get the return.

Hi Jackie

I suggest you use this online calculator.

We are not Accountants, so I cannot tell you whether or not there is a paper version of the CGT return.

Property118 and Cotswold Barristers specialise in forward tax planning and recommending and implementation of associated legal matters. We tend to work alongside our Clients existing Accountants .

I understood that it was decreed recently any capital gains, whenever they occurred during the tax year, had to be declared almost immediately and any tax owing paid then and there. The thread above seems to imply that paying of CGT can be delayed until next self assessment tax return is submitted.

Reply to the comment left by Richard Adams at 10/05/2022 - 13:36
The gain has to be reported and the tax paid within 60 days of completion. The date of exchange determines the tax year in which it falls.
It can be reported online or in a special paper CGT return.
If you already do annual tax returns it has to be duplicated in that.

Thanks Olls63. This is what I thought. I don't understand Nicky Kita's remarks about the connection between CGT and annual income. So if I incur a capital gain today I calculate it and pay within 60 days depending if I am a low or high tax payer, ie 18% or 28%. Got it. Later on in tax year when doing my self assessment tax return I appreciate needing to mention I have paid CGT earlier but the tax calculation telling me what I need to pay surely cannot be influenced by the CGT I have already paid. Can it?.

Reply to the comment left by Richard Adams at 10/05/2022 - 14:07
Whether you pay CGT at 18% or 28% depends on whether you are a basic or higher rate income tax payer.
It is a mess and I imagine it will revert to the old system where it is taxed at your income tax rate.
If your income and taxable gains take you over £50,270 that excess will be taxed at the higher rate of 28%. So you can be taxed at both rates.
The CGT is influenced by your income tax rate not the other way round.
If when doing your annual return you realise that you should have paid more CGT, you can amend the online calculation and pay it that way.
The gain will go in the annual return, there is a section to show that you have already reported it, and the amount of CGT you have paid.
Unfortunately HMRC haven't linked the online CGT reporting system to the self-assessment system, so any CGT amendments need to be made online, rather than in the annual return.

Thanks. Got it at last. CGT occurs in May say and I am a lower tax earner so I pay at 18%.In the following months my income soars so I am a higher tax earner by self assessment time. HMRC will then demand a further CGT payment taking into account what I have already paid. Phew! Thanks for clearing this up.

Many thanks to you all for the info - very helpful

Whooo, this is getting me excited.
As a group of 4 we own a property that we intend to sell with a £130k capital gain (£120k to £250k, we clamed expenses from income)
Am i right to think this is the calculation for tax purposes.
£130k / 4= £32,500 gain each
£32,500 less our allowance of £12,300 = £20,200
Each of us then has to pay cgt at 18% on £20,200 =£2,960 withing 60 Days of sale

We can then each do our own thing with personal income.

Am i right to think the maximum i can now earn from other sources is then (£50,271 less £20,200 , hence) £30,071 taxed at 20% from £12,571 to £30,071 so about £3,500ish

Yippeeee