Capital Gains Tax glitch hits property sales, says accountancy firm

Some sellers are suffering cash flow issues as a result of glitches in the Capital Gains Tax reporting system, according to a leading accountancy firm.

The issues arise when buy to let owners or those with multiple properties sell homes in consecutive tax years.

Elaine Shiels of RSM says: “Buy to let investors who are reducing their portfolio and owners of other properties which will give rise to a taxable gain on sale, may make taxable disposals in consecutive tax years. Obvious perhaps, but unfortunately HMRC’s systems cannot cope with that.”

She continues: “If the taxpayer reported a 2020/21 taxable gain online, reporting a 2021/22 taxable gain will almost certainly generate an incorrect calculation. HMRC describes this as a temporary problem and advises that vendors ask for a paper return to resolve the issue.”

Shiels says a second problem connected with Capital Gains Tax and property may be more worrying still.

To illustrate it, she gives the example of a couple who sold a property in May last year.