Capital gains - main residence

"Clifford Frisby" wrote

If you believe that, then why didn't 'Which?' put that statement in the paragraph referring to "if you receive a tax return"?

They didn't - they put it in the paragraph referring to "if you *don't* receive a tax return..." instead.

"Clifford Frisby" wrote

So why do 'Which?' tell you to read them, even if you *don't* get a tax return?

If you get a short form tax return, the Short Guide (SA200) gives you all you need to know about whether you need to fill in the Capital Gains form SA200(CG). If you don't get a tax return form, I don't see how the average tax payer can be expected to know the rules.

I once picked up a copy of the US Tax Return for 1964, which was a single sheet of paper. It's a model we might well emulate.

"Ronald Raygun" wrote

'Which?' states that the rules "aren't straightforward" and refers the reader to the SA108(Notes), recommending they read them carefully. Anyone doing as 'Which?' suggests will see the "4x allowance" rule...

"Ronald Raygun" wrote

How can ignorance be a valid defence?! Eg If someone starting self-employed work doesn't know that they need to notify IR within 3 months, then can they get away with not notifying?

It can be, provided it is unreasonable for the authorities to expect the person to be well-informed. No-one can hope to get away with murder just "because nobody told them it was against the law" because one is expected to know intuitively that that sort of thing is wrong. But it's not so clear-cut in the case of obscure tax rules which utterly fail to chime with intuition.

Ha! You don't need to notify HMRC. You need to notify NICO. :-)

That's an awkward one (aren't they all?). There have been publicity campaigns to get the message across to people. That itself looks like an admission by the authorities that the onus is on them to make people aware of this obligation, which in turn enforces my view that what one cannot reasonably be expected to know cannot create any real obligation.

I think that's possibly too harsh on the Revenue. CGT1 does explain that it is conditional, and tells you what the conditions are. The documents which refer to >4xAEA seem to comprise only the Return itself and SA150 (helpfully entitled "Tax Return Guide -- How to Fill In Your Tax Return"). These two seem pretty clear in their more limited scope. Are their any others?

True - search results are bloated, flat, unstructured things, and there's not a great deal that can be done about it. But to be fair, if you stick "Capital Gains" or "Capital Gains Tax" into the HMRC search engine, then that bloated, flat, unstructured list is prefixed by a large box in which it says "Recommended Links: Capital Gains Tax", and if you follow it you get a page of structured information, including (near the top and in this order) "Capital Gains Tax - A Quick Guide" and "Introduction to Capital Gains (CGT1)". The 'tax return' docs look as though they are all further down, and rightly so.

They put it *after* the words "If you receive an tax return..." and before the sentence beginning "If you don't receive a tax return.

I do see what you mean about the apparent new paragraph beginning "The capital gains pages aren't straightforward..." But I venture to persuade you that this is either a sloppy typesetting error, or, more likely, designed to separate that sentence from the text of the final bullet point which precedes it. This surely seems more reasonable than to associate the advice with an 'If..' which hasn't even yet been given.

(In any case, I could just concede to your interpretation of Which? but then profess that Which? is plain wrong (I have never insisted that Which? *must* be correct.) After all, CGT1 is my new friend!)

I really don't think Which? is doing that at all. If you think that it is, then you must at least also think that it is an excruciatingly badly structured piece of writing, even if that really *is* a new paragraph indentation that you're looking at.

NICO comes under HMRC, so "notify HMRC" is correct but at the NIC Office.

DF

To cover their backs. They are not authoritative source of tax advice.

"john boyle" wrote

They are "not authoritative", yet you believe them over the IR?

"Clifford Frisby" wrote

Yes, the one that 'Which?' recommend you read -- SA108(Notes)!

Oh dear, Sunday has started badly. :)

I did not think the thread was going to be this long when I replied, from memory, yesterday.

I have now reviewed the relevant legislation, and must concede that my earlier statement was incorrect.

There is no need to report Nil chargeable gain(s), even if total proceeds is more than 4x Annual Exempt, unless you *HAVE* a Return to complete.

Section 3A TCGA 1992 is the relevant section for the 4x limit, and refers at subsection(1)(b) to "a statement to that effect is sufficient compliance with so much of any notice under section 8 of the Management Act as requires information for the purposes of establishing the amount in which he is chargeable to capital gains tax for that year."

Section 7 TMA 1970 is the section which requires anyone, who has *NOT* received a Return to notify the Inland Revenue (now HMRC) about chargeability "to income tax or capital gains tax". So no CGT payable, no need to report chargeability, and no need to report 4x Annual Exemption with no CGT due.

Clifford, my previous post was incorrect - my apologies.

Please see my post further down for the relevant legislation.

No need to apologise, Doug. This is the most fun I've had on a Saturday night for a long time.

Much appreciated, as always.

In message , Tim writes

Me? NO. every time I read something in Which about something I know about, they seem to get it wrong!