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CAPITAL GAINS TAX OVERHAUL

The Office for Tax Simplification (OTS) is calling for an overhaul of how capital gains tax (CGT) is reported.

The report is the second of its kind, looking at ways to simplify the practical, technical and administrative issues surrounding capital gains tax (CGT) as requested by the Chancellor in July 2020.

Afford Bond Tax Director, Chris Regnauld commented: "The report's number one recommendation involves HMRC integrating the three main ways of reporting a capital gain into a new ‘single customer account' to act as a central hub for CGT data, replacing personal tax accounts. Many people have limited understanding - or even awareness of - capital gains tax. And as the tax tends to affect taxpayers on a one-off basis (with over 70% of those paying it in the eleven tax years to 2017-18 only doing so once in that period), they do not so readily pick up the knowledge and experience that comes from dealing with something regularly."

At the moment, taxpayers must report a capital gain through a self assessment, a UK property tax return or the capital gains tax service.

The OTS, commented: "Integrating CGT into the single customer account is a natural ambition for this HMRC programme and would reduce the need for people to fill in a full self-assessment return just because they need to report a capital gain."

The OTS made 13 other recommendations in their report, including extending the UK property tax return deadline from 30 to 60 days - and giving separating and divorcing couples more time to transfer assets between themselves without triggering CGT charges. Something which sadly, may come into play more as we emerge out of lockdown and Covid restrictions.

If you need help with capital gains tax, please email Chris.Regnauld@affordbond.com or use the Contact Us form here on our website.