Office of Tax Simplification: Capital Gains Tax review – call for evidence

In our submission, we highlight the fact that the majority of CGT taxpayers pay either no income tax or only pay it at the basic rate. For this population, we discuss the disposals of properties which have at some point been the taxpayer’s only or main residence but not throughout the entire period of ownership.

We explore how this is an issue which bring complexity and challenge in terms of awareness that a chargeable disposable has been made, calculating the gain, calculating the tax, reporting the disposal and making the payment of CGT.

We make a number of suggestions about how the CGT system may be improved for unrepresented taxpayers, including:

• consideration of how to make taxpayers more aware of their potential CGT obligations on the sale of property;
• a possible additional CGT allowance which applies to the disposal of a main residence where full private residence relief is not available;
• relaxations for separating couples to allow them more time to make no gain/no loss transfers, and extended private residence relief for former spouses and civil partners who leave the family home;
• clarifications and improvements to the process of nominating a property as a main residence;
• various possible exclusions from the obligation to make a 30-day report on the disposal of UK residential property, as well as an extension of the period allowed to 90 days; and
• improved guidance on GOV.UK on various CGT issues.

Our submission can be found

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