The deadline for reporting disposals and payments has been updated, and temporary guidance added on how to send a return form for 2018 to 2019.
The guidance states that taxpayers ‘should report disposals between 6 April 2018 to 5 April 2019 in the ‘Disposal between 6 April 2017 and 5 April 2018’ box on the relevant CGT tax return.
There is a 30-day window to report the disposal online, so non-residents must tell HMRC within 30 days of completion of conveyance, for example, no later than 31 July if the conveyancy is completed on 1 July.
The new rules have created confusion among overseas owners of UK property, with a number of rulings at the First Tier Tribunal (FTT) appearing to cast further doubt over the interpretation of the rules and the level of awareness of the changes, particularly when it comes to penalties, which are issued if the NRCGT return is not submitted within the 30-day deadline.
Once a penalty notice is received, the taxpayer only has 14 days to make the payment.
A Freedom of Information request made by Croner-i Tax and Accounting showed that a third of the 31,626 NRCGT submissions received by 20 September 2017 were subject to penalties as they did not meet HMRC’s 30-day deadline.
There were 11,850 late returns and HMRC issued penalties for £2.04m. This represented nearly 10% of the total tax due for NRCGT of £23.7m.
A spokesperson at HMRC told Accountancy Daily: ‘Late NRCGT returns are subject to penalties. However, late payments on account are subject to interest. This isn’t calculated until the 31 January following the end of the relevant tax year. If payment is late because of our being slow in issuing a charge reference number then the interest should be appealed and we will waive it. But we are not behind so that should not be a problem.
‘We took a soft approach on introduction (6 April 2015) and no late penalties were issued in relation to returns received prior to 6 May 2016. The rules are now very well established.’
If any NRCGT payment remains unpaid after 31 January after the end of the tax year of the disposal, a late payment penalty of 5% of the tax outstanding will be charged.
The disposal must be reported online using the non-resident CGT return within the 30-day deadline, even if:
- there is no tax to pay;
- a loss has been made;
- taxpayer is registered for self assessment;
- registered with HMRC for corporation tax; and
- taxpayer is registered to report under annual tax on enveloped dwellings (ATED) or ATED-related capital gains tax returns.
If a property was jointly owned, each owner must tell HMRC about their own gain or loss. Special rules apply if a UK residential property is given to a spouse, civil partner, or to charity.
In certain instances, the NRCGT will be due within the same 30-day period, although there are exceptions to the ‘pay now’ rule for taxpayers that already have an existing relationship with HMRC - for example, through self assessment. It is then possible to either:
- pay when annual self assessment return is submitted, or
- defer payment until the normal due payment date.
Different rules apply if someone is temporarily non-resident and makes disposals during a tax year when they were either not resident in the UK or overseas as part of a split year. For those who meet the temporary non-resident rules then the portion of gain not charged to NRCGT will come within the scope of UK CGT for the year, or period of return to the UK.
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