Revenue Note for Guidance

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Revenue Note for Guidance

CHAPTER 5

Capital gains tax: returns, information, etc

Overview

This Chapter provides for the making of capital gains tax returns. The general application for capital gains tax purposes of the income tax provisions relating to the making of returns is set out (section 913) and then follows provisions for returns by particular businesses or individuals such as issuing houses, stockbrokers, auctioneers, etc (section 914), nominee shareholders (section 915), parties to a settlement (section 916), persons involved in non-resident companies and trusts (section 917), and persons involved with non-resident trustees (section 917A to 917C)

Section 871 authorises the combination of any return relating to chargeable gains or capital gains tax with a return relating to income or income tax.

Reference should be made to Chapter 3 of Part 41A as regards the obligation to make a return of chargeable gains for Self Assessment purposes.

Reference should be made to Part 47 (Chapter 3) for details of penalties for failure to make certain returns and penalties for fraudulently or negligently making incorrect returns. Part 47 also contains provisions imposing a surcharge for the late submission of a return (section 1084) and for the publication of the names of tax defaulters, including persons who have been successfully prosecuted for failure to make a return (section 1086).

913 Application of income tax provisions relating to returns, etc

Summary

This section imposes a statutory obligation on persons to furnish returns for the purposes of capital gains tax when required to do so by notice, and requires persons liable to the tax who have not been served with a notice to give notice to the inspector that they are chargeable. In general, the section applies to capital gains tax the income tax provisions relating to returns, etc and provides that certain specific income tax provisions relating to returns are to apply also to capital gains tax. In addition, the section provides for the furnishing of information regarding acquisitions of assets, the names of persons from whom assets were acquired and the price at which assets were acquired.

Details

Application of income tax provisions

(1) This section provides for the general adaptation for capital gains tax purposes (and subject to any necessary modifications) of the income tax provisions requiring returns to be made and notice of liability to be given by a liable person.

Application of specific income tax provisions

(2) Without prejudice to the above, the following income tax provisions are in particular, and subject to any necessary modifications, to apply for capital gains tax —

  • requirement to give notice of liability to tax (section 876),
  • returns by persons chargeable (section 877),
  • returns by persons acting for incapacitated persons and non-residents (section 878),
  • returns of chargeable gains (section 879),
  • partnership returns (section 880),
  • returns by lessors, lessees and agents (section 888),
  • power to require production of accounts and books (section 900), and
  • returns by holders of mineral licence (Schedule 1, paragraph 1).

Acquisition of assets

(3) A person may be required to furnish particulars not only of realised gains but also of assets acquired by the person. However, the acquisition of assets as trading stock or the acquisition of government and certain other securities exempted under section 607 or other assets exempted under section 613 (miscellaneous exemptions for certain kinds of property) need not be returned.

(4) Particulars regarding the person from whom an asset has been acquired and the price paid for the asset may also be required.

Company reconstructions or amalgamations

(5) The transfer or receipt of shares or debentures on a company amalgamation by exchange of shares (section 586) or on a company reconstruction or amalgamation (section 587) which, by virtue of section 584(3) (reorganisation or reduction of share capital), does not give rise to a charge to capital gains are to be regarded as a disposal or acquisition for the purposes of making a capital gains tax return and for that purpose only. Consequently, details of such transfers or receipts are returnable.

Returns by lessors, lessees and agents

(6) In applying section 888 (returns, etc by lessors, lessees and agents) for the purposes of capital gains tax, property and leases of property other than premises are included in its application in addition to premises and leases of premises.

Partnership returns

(7) In addition to the requirements of returns by partnerships under section 880, this section also requires returns on the acquisition and disposal of partnership assets during the period to which the return relates.

Married persons

(8) A return under section 879 of chargeable gains made by a married woman (who is not separated from her husband) may be requested from her or, if she is jointly assessed with her husband for a tax year, from her husband.

Relevant Date: Finance Act 2019