Before We Begin: What Is CGT and CGT Return?

CGT is an abbreviation for Capital Gains Tax. It's a tax on the profit you make when you sell or dispose of an asset that has increased in value since you acquired it. Simply put, you only pay CGT when you make a profit on the sale of an asset. This tax is levied by Her Majesty's Revenue and Customs (HMRC). A CGT return is a declaration to HMRC detailing the capital gains or losses you've made on chargeable assets in a given tax year. Filing a CGT return is mandatory if you're liable to pay CGT.

Who Needs to Send a CGT Return?

You're only required to submit a CGT return if:

1. You've Made a Capital Gain of More Than the Annual CGT Allowance: The annual CGT allowance for the tax year 2023-24 is £12,300. If your profit exceeds this amount, you must file a return.

2. You've Sold a Chargeable Asset: Chargeable assets include property, shares, and investments. Some assets are exempt from CGT, such as your home and personal belongings.

3. You're a Non-Resident UK Landlord: As a non-resident UK landlord, you must pay CGT on any profits from the sale of a UK residential property.

Where to Send Your CGT Return

There are two ways to send your CGT return:

1. Online: You can file your CGT return online via the government's official website. This is the quickest and easiest way to submit your return.

2. By Post: You can also send your CGT return by post to the following address:

Self Assessment
HM Revenue and Customs
BX9 1AS
United Kingdom

Deadlines for Filing a CGT Return

The deadline for filing your CGT return depends on whether you file online or by post:

1. Online: If you submit your return online, you have until midnight on 31st January following the end of the tax year in which you made the capital gain.

2. By Post: If you file your return by post, it must be received by HMRC no later than midnight on 31st December following the end of the tax year in which you made the capital gain.

Penalties for Late Filing

Filing your CGT return late could lead to penalties. The penalty amount is calculated based on the length of the delay and the amount of tax you owe.

Conclusion

If you've made a capital gain, it's important to file a CGT return to HMRC. Failing to do so could result in penalties. Whether you file online or by post, ensure you meet the deadlines to avoid any potential issues.

Frequently Asked Questions

1. What if I don't owe any CGT? Do I still need to file a return?

   • Yes, you still need to file a return if you don't owe any CGT. This is because you may have losses that you can carry forward to future tax years.

2. What if I'm not sure if I need to file a return?

   • If you're unsure whether you need to submit a return, it's generally safer to err on the side of caution and file one.

3. Can I file a CGT return jointly with my spouse or partner?

   • No, you cannot file a joint CGT return. Each person must file their own individual return.

4. What if I make a mistake on my CGT return?

   • If you make a mistake on your return, you can submit an amendment to HMRC.

5. How can I get help with filing my CGT return?

   • You can get help from HMRC's website or by contacting their helpline.