HM Revenue & Customs (HMRC) is known to be running another of its ‘one-to-many’ nudge letter campaigns.
This time, it is writing to taxpayers who have submitted their Self-Assessment Tax Return for 2024/25 and may have applied the wrong rate of Capital Gains Tax (CGT) on disposals made on or after 30 October 2024.
With effect from 30 October 2024, the main rates of CGT applying to disposals of assets other than residential property increased from:
- 10% to 18% for basic rate taxpayers; and
- 20% to 24% for higher rate taxpayers.
Given that this was an ‘in-year’ change to the rates, HMRC had warned that adjustments to 2024/25 returns may be required to ensure the correct rates were applied, and published a calculator to aid with this.
HMRC is writing to taxpayers who have declared a disposal made on or after 30 October 2024 on their 2024/25 tax return and who appear to have made an error when calculating the amount of CGT due.
The taxpayer will receive one of the following letters depending on their circumstances:
- A letter confirming that the return includes an adjustment, but that it appears to be incorrect.
- A letter confirming that the return does not include an adjustment and it appears that an incorrect rate has been used when calculating the CGT due.
If you are in receipt of one of these letters, it is important that you take action promptly. If you are unsure about how to respond to the letter, seek advice from an accountant who can support you to do so within the allotted timeframe.
If the adjustments made or the rate applied is incorrect, we can help you to calculate the right amount of CGT due and to amend the return if necessary.
If your return is correct as it is, we can help you to make contact with HMRC and notify them that this is the case.
To talk to us about a nudge letter that you have received from HMRC, or for support with Self-Assessment and wider tax compliance, contact us today.
