Is Capital Gains Tax advice worth the cost?
Discussion
We recently sold a 2nd property and have been fortunate enough to make about £160K on the sale. Our IFA suggests getting a CGT specialist accountant to handle the CGT owing, but is an accountant likely to be worth the cost of employing them? The house had
I believe I can offset the costs of
- buying / selling fees
- addition of 2nd bathroom
- wall removed to extend kitchen
I believe I can offset the costs of
- buying / selling fees
- addition of 2nd bathroom
- wall removed to extend kitchen
I know this is stating the extremely obvious but it depends on
- how confident you are in your own knowledge of CGT
- what the likelihhod is of an accountant identifying something you might miss
- how much this saves you
- how much the accountant charges.
ETA My nephew forgot to submit his CGT return on time and (somehow) it ended up in a full investigation into both his and his wife's tax affairs. Fortunately for both of them they were legit and above board but it created a lot of unnecessary stress. HMRC kept asking for more and more information including bank statements from people who had lent him money and his partner's tax affairs. they only backed off when his accountant told them to FO after providing reams and reams of information.
- how confident you are in your own knowledge of CGT
- what the likelihhod is of an accountant identifying something you might miss
- how much this saves you
- how much the accountant charges.
ETA My nephew forgot to submit his CGT return on time and (somehow) it ended up in a full investigation into both his and his wife's tax affairs. Fortunately for both of them they were legit and above board but it created a lot of unnecessary stress. HMRC kept asking for more and more information including bank statements from people who had lent him money and his partner's tax affairs. they only backed off when his accountant told them to FO after providing reams and reams of information.
Edited by Countdown on Saturday 5th October 16:26
Does the IFA also happen to have a recommended chap or chappess ?
A chunk less than that but have had a couple if CGs on sold properties. I just read the HMRC pages, there are rather a few and pulled it together in a spreadsheet. Both of mine had some periods of residency to offset too but not overly complex.
If you are used to and happy paying an IFA then as long as the accountant is sensible in charges, hundreds not thousands then possibly saves some reading.
A chunk less than that but have had a couple if CGs on sold properties. I just read the HMRC pages, there are rather a few and pulled it together in a spreadsheet. Both of mine had some periods of residency to offset too but not overly complex.
If you are used to and happy paying an IFA then as long as the accountant is sensible in charges, hundreds not thousands then possibly saves some reading.
There is a useful calculator here, including some handy explanatory notes if you scroll down (the red text are links)
https://www.propertysolvers.co.uk/homeowners-hub/t...
I would have thought this calculator + reading the HMRC pages would be sufficient and no need to pay anyone
https://www.propertysolvers.co.uk/homeowners-hub/t...
I would have thought this calculator + reading the HMRC pages would be sufficient and no need to pay anyone
As others have already said, it really depends on how confident you are at calculating your liability. The HMRC website gives some pretty good guidance.
The key thing to remember is that the clock is already ticking - you must report and pay the tax within 60 days of disposal: https://www.gov.uk/capital-gains-tax/reporting-and...
The key thing to remember is that the clock is already ticking - you must report and pay the tax within 60 days of disposal: https://www.gov.uk/capital-gains-tax/reporting-and...
C69 said:
As others have already said, it really depends on how confident you are at calculating your liability. The HMRC website gives some pretty good guidance.
The key thing to remember is that the clock is already ticking - you must report and pay the tax within 60 days of disposal: https://www.gov.uk/capital-gains-tax/reporting-and...
I want to get it done before the budget at the end of this month. I expect CGT rates or the allowance to be negatively affected.The key thing to remember is that the clock is already ticking - you must report and pay the tax within 60 days of disposal: https://www.gov.uk/capital-gains-tax/reporting-and...
ferret50 said:
Lets think about this, perhaps someone buys a property in Europe, sells it and makes a gain, should this be declared?
If it is not declared, just how do HMRC know about it?
The institution you paid the money into might well ask a few questions and then head straight to HMRC…..If it is not declared, just how do HMRC know about it?
The publicly-available HMRC manual used to advise staff that CGT calculations submitted from taxpayers without professional representation (i.e. accountants) were automatically flagged for attention. I don't know if that's changed, but I doubt it - CGT can get tricksy..
Of course, that doesn't actually mean HMRC will mount an investigation. Just that they may think about it in the light of other demands, staffing, etc.
I'd suggest that you ask a local accountant how much they'd charge to submit your return & then decide whether the cost was worth avoiding potential hassle.
Remember if they do pick you up at a later date & go for back tax, there may be an interest charge at least.
Of course, that doesn't actually mean HMRC will mount an investigation. Just that they may think about it in the light of other demands, staffing, etc.
I'd suggest that you ask a local accountant how much they'd charge to submit your return & then decide whether the cost was worth avoiding potential hassle.
Remember if they do pick you up at a later date & go for back tax, there may be an interest charge at least.
ferret50 said:
Lets think about this, perhaps someone buys a property in Europe, sells it and makes a gain, should this be declared?
If it is not declared, just how do HMRC know about it?
The first question does of course depend on many things.If it is not declared, just how do HMRC know about it?
If it should be declared but isn't, HMRC have many data sources at their disposal. HMRC could IMO find a very significant proportion of tax evaders with the data they have available. Their problem is that they have the administration capabilities of a chimp on ketamine.
MaxFromage said:
The Budget is irrelevant to you. You have sold the property and are subject to the rules in place on the date you exchanged contracts.
Unless they back date any changes to the start of the tax year, which is admittedly unlikely but with the current set of lunatics who’s to say.MaxFromage said:
The Budget is irrelevant to you. You have sold the property and are subject to the rules in place on the date you exchanged contracts.
Unless they back date any changes to the start of the tax year, which is admittedly unlikely but with the current set of lunatics who’s to say.For what it's worth we used one when we sold our house. A few factors in our decision: our situation was complicated as we lived abroad and it was a UK house sale which allowed us to recalculate the value of the house to 2015, we also potentially needed clear layout and explanation for French authorities who potentially also wanted tax but most importantly we'd never submitted a CGT return before and wanted to do it right. Cost was just a few hundred pounds.
Late reply but went through an almost identical situation, second property sale, structural works, buying and selling costs to offset.
I hired WR Partners to handle this, they went through every deduction methodically, including the enhancement vs repair distinction which is where most people leave money on HMRC's table. The final CGT figure was meaningfully lower than my initial estimate and their fee was a fraction of the difference.
I hired WR Partners to handle this, they went through every deduction methodically, including the enhancement vs repair distinction which is where most people leave money on HMRC's table. The final CGT figure was meaningfully lower than my initial estimate and their fee was a fraction of the difference.
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