The Office of Tax Simplification (OTS) has released proposals to simplify capital gains tax in a new report following on from its review into CGT requested by the chancellor Rishi Sunak last year.
The report, which highlights a broader concern about the low level of public awareness of the tax, makes 14 recommendations, including integrating capital gains tax into the new Single Customer Account, making it a central hub for capital gains tax data.
Bill Dodwell, OTS tax director said: “Integrating Capital Gains Tax into the Single Customer Account is a natural ambition for this vital HMRC programme and would reduce the need for people to fill in a full Self-Assessment return just because they need to report a capital gain.”
The latest report from the OTS makes a series of recommendations that it believes will improve the system and the wider housing market.
The OTS has once again called for the deadline for the payment of capital gains tax to be extended from 30 to 60 days following disposal of a residential property.
It says that around a third of those liable to pay CGT on the sale failed to file on time under the existing 30-day rule.
Propertymark points out that the OCT acknowledges that careful consideration would need to be given to whether information should be provided by estate agents, conveyancers, or both.
Late filing penalties totalling just over £1.3m have been issued since the 30-day window was introduced last year.
Timothy Douglas, Propertymark policy and campaigns manager, commented: “Due to the impact of property tax holidays across the UK, property buyers continue to fuel the post-Covid economy. Nevertheless, many people have limited awareness or understanding of Capital Gains Tax. Knowledge of the rules is particularly important when selling a buy-to-let property or a second home.
“In response to the recommendations, Propertymark would support extending the reporting and payment deadline because this would allow more people to comply with the rules. However, agents already provide a lot of information to consumers, so any plans to mandate information packs must be well-coordinated with UK Government reforms for home buying and selling as well as differing rules and regulations across the UK, in particular, the Home Report