CGT 30 day rule - report if no gain?


I have an estate whereby the deceased’s main residence has sold for the same value as the Probate value.

I can’t find a concrete answer as to whether as PRs, we have to report the sale of the property even though there isn’t a gain. I read somewhere that PPR has to be ‘claimed’ but surely that’s only if there is a gain?

Can anyone point me in the right direction?

Many thanks.

Sarah Collier
Ware & Kay

FA 2019 s 14 and Sch 2 are relevant with respect to disposals of residential property.

S 14 specifically provides:

“14 Disposals of UK land etc: payments on account of capital gains tax
(1) Schedule 2 makes provision for the purposes of capital gains tax requiring returns, and payments on account of that tax, to be made where there is—
(a) any direct or indirect disposal of UK land which meets the non-residence condition (whether or not a gain accrues), or
(b) any other direct disposal of UK land on which a residential property gain accrues.

Hence, under S 14(1)(b) there is no need to make any return where no capital gain accrues as seems to be the position in your case. As there is no capital gain in any event there is no need a to ascertain if any PPR needs to be claimed (such a claim would need, if necessary, to be claimed on the CGT pages of the Trust and Estate Return).

Malcolm Finney

But has anyone considered the position where the trustees have sold the property which has been the LT’s main residence so that full PPR will be available?. The Trustees need to claim the PPR which will be done in the SA Return issued after 6 April next year. So is the position that until that claim is made the gain is in charge and tax is payable which would then be repayable when the claim is made?

Nigel Scase
Greene & Greene

There seems to me to be some inconsistencies/ambiguities in the various articles and commentaries I have read regarding making returns and paying notional CGT payments on disposals of residential properties by UK residents. My reading of the legislation is as follows.

Para 3 of Sch 2 FA 2019 requires a return to be made following a direct disposal of UK land (para 1(1)(a)) albeit subject to para 3(3)(a) which refers to para 4 under which no return is required if a residential property gain accrues if no payment on account is required as prescribed in para 6. Para 6 requires an amount of CGT to be notionally chargeable as computed under para 7. Para 7 states that the notional chargeable amount is the amount of CGT which the person would be liable.

However, if PPR applied to the whole capital gain arising on the disposal then no CGT would arise and no such notional payment would be necessary.

The consequence is therefore that on a disposal by trustees where a capital gains arises but the conditions of TCGA 1992 s 225 are satisfied there is no requirement either for any return to be made or any notional amount of CGT to be paid.

In due course, when the Trust and Estate return is filed an appropriate claim would need to be lodged (TCGA 1992 s 225(1)) justifying the earlier non-notional payment and non-filing of any return.

Malcolm Finney

1 Like

I find the best way to consider this is to remember that HMRC’s reason for introducing the CGT Returns for UK resident individuals, trustees and PRs was to get a CGT payment earlier than would be the case if the gain is only declared via the SA return. Therefore, if there is no CGT to pay, there is no need to file a CGT Return.

The situation is different for non-UK residents, who have to file a CGT Return regardless of what reliefs are being claimed or whether there is CGT to pay (and, of course, also have to declare non-residential UK property disposals and indirect property disposals now as well).

Jane Hodge
Charter Tax

Hi Sarah,

I may be missing the point but if you have sold for probate value you wouldn’t need to claim for PPR. ie proceeds £150,000, probate £150,000, gain nil. This would also mean no report is required.

Nigel has asked about making the ‘claim’ for PPR. My understanding of the requirements for online reporting (and I’m happy to be advised otherwise), is that you only need to report (if UK resident) if there is a tax liability arising. This is the bottom line figure after allowances and reliefs have been claimed. If you’ve worked through the system it asks about these and how much you want to claim and helps you come to a tax liability. If it is nil, no report is necessary. You would then make the actual claim for relief on the tax return.

We have many individual clients who have made disposals but no gain and so are just making a note to report on the 2021 Tax Return.

I hope this helps.

Lucy Orrow CTA TEP
Lambert Chapman LLP

Hello Nigel.

It says on HMRC website:

If you are a trustee who sells or disposes of a UK residential property held in a UK resident trust you must ensure that any Capital Gains Tax liability due is reported and paid within 30 days of the completion of the disposal - in the same way as for UK resident individuals.

From CTA website you can see:

You therefore do not need to make a 30-day report in any the following scenarios:

The date of exchange was before 6 April 2020 (even if the date of completion falls on or after 6 April 2020).
There is no capital gains tax to pay. This will most commonly be the case where you are disposing of a property which has been your main residence throughout the entire period of ownership. Full private residence relief can also apply in other circumstances. Alternatively, there may be no capital gains tax to pay because the chargeable gain does not exceed the annual exemption (£12,300 for 2020/21), or there is a capital loss.
The property is not residential.
The property is not in the UK.

In this case you will not need to do Land Return as PPR fully covers the gain and there is no gain to report.

Hope it helps.

Kind regards,

Andrei Baliuk