How Does HMRC’s Capital Gains Tax Manual Help Tax Payers?

HMRC’s Capital Gains Tax Manual is an elaborately detailed document that can help taxpayers not only learn about what and how to report when it comes to Capital Gains Tax but also provides guidelines on the different situations where Capital Gains Tax is applied, depending on one’s circumstances.

How Does HMRC’s Capital Gains Tax Manual Help Tax Payers?

HMRC’s Capital Gains Tax Manual helps taxpayers by providing them with detailed guidance regarding the gains (or even losses) that they incur on the disposal of an asset, how it is to be recorded at the time of the occurrence and how such as capital gains acquired through asset sales should be reported in a self-assessment tax return.

Disposal of an asset includes the following instances. It must be reported in a self-assessment tax return when the owner of the asset experiences a gain or a loss at its disposal:

• selling the asset
• giving the asset away in the form of a gift 
• transferring the asset to someone else
• swapping the asset for something else in exchange
• receiving compensation for an asset; such as an insurance payout if the asset is lost or destroyed

While HMRC’s Capital Gains Tax Manual was primarily developed and designed for the consumption of their internal staff members, especially those who deal with matters related to Capital Gains Tax, it is easily available on their official website for any taxpayer to read or download if they need guidance regarding Capital Gains Tax.

This manual is a much more detailed document that supplements the basic guidance provided to taxpayers through the tax return and “help” sheets. Readers will find information related to (but not limited to) private residence relief, including definitions, computation, and division of residence on separation or divorce in HMRC’s Capital Gains Tax Manual.

What Are Chargeable Assets According To HMRC’s Capital Gains Tax Manual?

According To HMRC’s Capital Gains Tax Manual, chargeable assets include the following:

• personal possessions (such as jewellery, paintings, antiques, coins and stamps valued at £6,000 or more (excluding your car)
• property that does not serve as your main home (including business premises, land and inherited property)
• your main home; only if you’ve let it out, used it for business or it is too large
• shares that are not included in an ISA or PEP
• business assets such as land and buildings, fixtures and fittings, plant and machinery, shares and registered trademarks
• crypto assets including cryptocurrency and bitcoin

However, capital gains made on the following need not be reported to the HMRC. this makes these non-chargeable assets:

• ISAs or PEPs
• UK government gilts and Premium Bonds
• betting, lottery or pools winnings

How Do You Pay Capital Gains Tax According To HMRC’s Capital Gains Tax Manual?

According To HMRC’s Capital Gains Tax Manual, you can pay your Capital Gains Tax online using your Government Gateway user ID and password. Alternatively, you can ask HMRC for a printed form if you are uncomfortable using the online service.

You can call the HMRC to request the Capital Gains Tax form at 0300 200 3300, between Monday and Friday, from 8 am to 6 pm. Otherwise, you can write to them at the following address:

Capital Gains Tax Queries

HM Revenue and Customs

BX9 1AS

United Kingdom

Payments for Capital Gains Tax are usually made online through self-assessment. If you wish to make your payment through a cheque, you will need to make it payable to “HM Revenue and Customs only” and send it to the following address:

HMRC

Direct

BX5 5BD

One should bear in mind that it takes at least 3 days for payments to be cleared.

Conclusion:

The above article provides highlights on some of the key areas that taxpayers would be keen to learn about regarding HMRC’s Capital Gains Tax manual. However, it covers minute details regarding the eligibility, application and process involved in Capital Gains Tax payments. Since it is a complex topic, one may need the services of a professional tax advisor before they file their tax returns for Capital Gains Tax.

References:

Capital Gains Manual – HMRC internal manual – GOV.UK

CG60201C – Capital Gains Manual: Reliefs: contents – HMRC internal manual – GOV.UK