HMRC uses wrong tax year for CGT allowance for taxpayers

HMRC has sent out the wrong details of capital gains tax (CGT) allowance to thousands of taxpayers who reported CGT on their annual self assessment forms

HMRC has sent out the wrong details of capital gains tax (CGT) allowance to thousands of taxpayers who reported CGT on their annual self assessment forms

The problem occurred when HMRC sent out the wrong tax notes to taxpayers with the previous year’s CGT exemption, mistakenly using the 2017/18 allowance.

Taxpayers were told that their allowance was £11,300, rather than the correct 2018/19 figure of £11,700.

The mistake was in the notes rather than the tax return itself and only about 600 customers were affected as they complete a Capital Gains Schedule. The notes have already been corrected online and taxpayers do not need to take any action.

An HMRC spokesperson told Accountancy Daily: ‘We apologise for any confusion this has caused and have corrected the error. Nobody will lose out as a result of this.’

The current CGT rates are 28% on gains from residential property, 20% on other chargeable assets.

The forms were sent to around 350,000 taxpayers, according to reports in The Telegraph.

CGT is payable on the overall gain from the sale of an asset such as a business, second home, buy-to-let property and shares. The current CGT rates are xx% for basic rate taxpayers, rising to

There is also an annual CGT exemption, known as the annual exempt amount, which is £12,000 for individuals and £6,000 for trusts for the new tax year 2018/19.

The latest error follows on from mistakes made on the Scottish rate of income tax (SRIT) tax codes for Scottish parliament MPs, which resulted in MSPs receiving the wrong tax code.

Sara White

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