In HMRC’s latest ‘one to many’ campaign, they have checked information on share disposals against self-assessment tax returns and, where a disposal has not been declared in a self-assessment tax return, HMRC has advised the taxpayer that they may have to pay capital gains tax (CGT).
In the letters that HMRC have sent to taxpayers, it explains what is meant by a disposal and draws to their attention certain scenarios in which no CGT may be due (eg: total gains are less than the annual exemption amount for CGT purposes). HMRC advises the taxpayers to check their returns and sets out the action the taxpayers should take.
In respect of the letters that are being sent out to taxpayers, two different versions of the letter are being sent depending on whether the taxpayer is within time to amend their return. If they are not within time to amend their tax return then HMRC advise that they need to write to HMRC advising of the disposal proceeds received, acquisition costs, the amount of CGT the taxpayer believes they owe and details of why the taxpayer has admitted the gain.
If the taxpayer believes that there is no CGT to pay, they should write to HMRC and explain why this is the case.
The taxpayer must act within 60 days of the letter to avoid an enquiry or a compliance check by HMRC, which might be more onerous than answering their correspondence.
If you have received one of these letters, then we are here to help, please contact Nockolds on 0345 646 0406 or complete an online enquiry form and a member of the team will be in touch. If you are not sure whether you should be disclosing any disposal of shares to HMRC, please do not hesitate to get in touch.