CG-APP18-330 - Part 3 - CGT on UK Property Account and Self Assessment: Trusts and Personal Representatives of Estates – general approach
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3.3 Trusts and Personal Representatives of Estates – general approach {#trusts-and-personal-representatives-of-estates}
3.3.2 Reporting for 2020/21 SA tax return where there is an ‘initial overpayment’
3.3.3 Reporting for 2021/22 Trust / Estate SA tax return where there is an ‘initial overpayment’
3.3.4 Manual returns - Payment Reference Number
3.3 Trusts and Personal Representatives of Estates – general approach
If a trust or estate is required to complete a Self Assessment return, for example if the ‘complex’ criteria for an estate are met, they should include details of their total gains or losses and tax charged via the CGT on UK Property Account within that Self Assessment return. https://www.gov.uk/self-assessment-tax-returns/returns-for-someone-who-has-died(link is external)
If an estate does not meet the complex criteria and there is no other IT or CGT liability then provided the correct CGT return has been made for any UK property disposal, the estate does not need to notify HMRC separately of the UK property gain under the informal procedures.
Where a return is needed, the SA905 summary page notes(link is external) provide guidance on which boxes of the return need to be completed.
The following paragraphs set out some additional considerations that may arise in terms of the interactions between the Self Assessment process and the CGT on UK Property Account, depending on the timings and circumstances affecting each trust or estate.
Depending on the particular circumstances, the information within the CGT on UK Property Account may:
- Only relate to part of the total CGT due for the year e.g. there were other disposals of assets to report. In this case any additional CGT due should be reported and paid as part of the Self Assessment process.
- Equal the total CGT due for the year e.g. there were only UK property disposals in the year, all of which have been reported. In this case, once the figures within the CGT on UK Property Account are final, no further action is required in relation to CGT.
- Result in an ‘initial overpayment’ of CGT for the year. In this case, additional action may be required to ensure this is correctly accounted for - see section 3.3.1-2 for further details.
An example of where Situation 3 might apply is if there are other asset disposals later in the tax year that affect the overall CGT liability or if there are changes in the amounts originally reported in the CGT on UK Property Account.
3.3.1 Initial overpayments
An ‘initial overpayment’ is where the total CGT due based on the total gains (after losses etc) in the Self Assessment return is lower than the total of any CGT charged by the CGT on UK Property Account returns filed in respect of that tax year.
In some cases this ‘initial overpayment’ may have been paid to HMRC before completion of the Self Assessment return, and a partial or full repayment may be due depending on circumstances. In other cases, this ‘initial overpayment’ may have been charged but not yet paid e.g. where a return has been filed manually and no payment reference has yet been allocated. The sections below set out the actions to take depending on the circumstances.
3.3.2 Reporting for 2020/21 SA tax return where there is an ‘initial overpayment’
Where an individual has completed a Self Assessment return for the 2020/21 tax year which has resulted in an ‘initial overpayment’ of CGT for the year, but has not actually yet paid that ‘initial overpayment’ amount as defined above to HMRC, they should contact HMRC by telephone on 0300 200 3300 to enable HMRC to make a manual adjustment and offset the amounts to ensure no late payment penalty is triggered. If any further action is required HMRC will contact them to advise what that is.
If they choose to make payment in full of the Income Tax and other liabilities, that is generated by the calculation for the year – that is, pay the ‘initial overpayment’ as well as their actual overall tax liability - they should also then contact HMRC to request a repayment of that ‘initial overpayment’ of CGT. This will then be reviewed by HMRC.
Once the Self Assessment return has been submitted, they should not attempt to amend their return within their CGT on UK Property Account for the corresponding tax year.
3.3.3 Reporting for 2021/22 Trust / Estate SA tax return where there is an ‘initial overpayment’
Where they have completed a Self Assessment return for the 2021/22 tax year onwards which has resulted in an initial overpayment of CGT, this initial overpayment of CGT will be automatically offset against other SA charges to prevent them having to overpay. If there remains an overpaid amount of CGT following the offset against other liabilities, this figure will be displayed on the Trust Tax calculation but not automatically repaid.
HMRC should be contacted by telephone on 0300 200 3300 to enable any amount to be allocated to other tax charges or if appropriate a repayment made.
Once the Self Assessment return has been submitted, they should not attempt to amend their return within their CGT on UK Property Account for the corresponding tax year.
3.3.4 Manual returns - Payment Reference Number
If the CGT on UK Property Account return has been filed manually i.e. a paper return has been submitted, but payment has not been possible because no payment reference number has been allocated as yet, then the Self Assessment return should be completed to reflect the CGT that will be charged via the CGT on UK Property Account, and a note made in box 5.42 of the SA905 to advise that the charge reference has not yet been allocated.