OTS publishes second report on CGT review

Released 20 May 2021

The Office of Tax Simplification (OTS) has issued a second report as part of its ongoing capital gains tax (CGT) review.

The latest report considers a range of key practical, technical and administrative CGT issues and areas – from moving home to getting divorced, running or investing in a business or issues affecting land transactions. It also highlights a broader concern about the low level of public awareness of the tax, and the extent to which the administrative systems could do much more to support taxpayers.

The report makes 14 recommendations, including in the following areas:

Integrating CGT into the Single Customer Account;

UK property tax return – proposals to extend the reporting and payment deadline for returns to 60 days, or mandate estate agents or conveyancers to distribute HMRC-provided information to clients about these requirements;

Private Residence Relief nominations – proposals to raise awareness of how the rules operate, and in time enable nominations to be captured through the Single Customer Account;

Divorce and Separation – recommendations to extend the operation of the inter-spouse/civil partner charge rules to the later of: the end of the tax year at least two years after the separation event; and any reasonable time set for the transfer of assets in accordance with a financial agreement approved by a court or equivalent processes in Scotland; and

Treatment of deferred proceeds when a business is sold – Government should consider whether CGT should be paid at the time the cash is received in situations where proceeds are deferred, such as on the sale of a business or land, while preserving eligibility to existing reliefs.

Further details, including a link to the report, can be found at https://www.gov.uk/government/publications/ots-capital-gains-tax-review-simplifying-practical-technical-and-administrative-issues.

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