OTS publish second review of Capital Gains Tax
The Office of Tax Simplification published its second review of Capital Gains Tax on 20 May 2021, containing 14 recommendations.
The Office of Tax Simplification published its second review of Capital Gains Tax on 20 Ma
Article Posted date 24 May 2021
The Office of Tax Simplification (OTS) published its second review of Capital Gains Tax (CGT), requested by the Chancellor of the Exchequer, on 20 May 2021. The review makes 14 recommendations.
The recommendations include:
- Integrating the reporting of capital gains, which can currently be done in one of three main ways, into the new Single Customer Account to ease the administrative burden on those filing returns on disposals;
- Extending the reporting and payment deadline for CGT due on disposals of UK residential property to 60 days (it is currently 30 days). Alternatively, estate agents or conveyancers should be mandated to provide information to clients about the filing and payment requirements;
- Making changes to the share pooling rules so that shares held in more than one investment portfolio can be treated as separate share pools;
- A review of the operation of the nomination procedure for Private Residence Relief (which exempts main homes from CGT), to raise awareness amongst those who have more than one eligible home;
- Extending the time within which married couples or civil partners who are divorcing or separating can transfer assets between them without triggering a CGT charge;
- Reviewing when CGT is due on disposal of a business or land where the sale proceeds are other than cash at the time of sale. For example, where the sale proceeds are paid over a number of years, are part in cash and part in shares, or where the price is dependent on future events; and
- Making changes so that gains or losses on foreign assets are calculated in the relevant foreign currency and then converted into sterling.
Whilst the Government commissioned this review, it should be noted that these are not Government proposals. They will though be considered by the Government as part of its overall review of capital taxes. For our further thoughts on this, visit the Changing Face of Capital Taxes.