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Why does CGT online self assessment _require_ a purchase date?
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- Lemon Slice
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Why does CGT online self assessment _require_ a purchase date?
For the Nth year in a row now, I have found myself having to invent a purchase date for some fund units sold for CGT purposes last tax year. HMRC's online self assessment absolutely requires one. But I bought units of this fund monthly over time to cost-average, and as it is all in one big section 104 holding pile, providing a single purchase date is ... well ... impossible.
As usual I just made something up. This is stuff bought well after CGT indexation was scrapped, and I assume that's (one of) the reason(s) self assessment requires purchase dates (is it?). For most cases though it seems irrelevant, in which case making the purchase date optional rather than required would seem more sensible in the circumstances.
Am I missing something obvious? If not, what do other folk do when there really is no definable and single purchase date for a sold asset? I presume they just make something up, same as me?
Of course, this is just one among several weirdnesses lurking in online self assessment. The failure to apply foreign tax credits correctly that started last year appears to now be an annual thing. The limit of 10 interest account worksheets is needlessly arbitrary. And I always particularly enjoy(!) the annual warning about lengthy PDF downloads if using a 28.8k baud modem. Still better than paper, though. :-)
As usual I just made something up. This is stuff bought well after CGT indexation was scrapped, and I assume that's (one of) the reason(s) self assessment requires purchase dates (is it?). For most cases though it seems irrelevant, in which case making the purchase date optional rather than required would seem more sensible in the circumstances.
Am I missing something obvious? If not, what do other folk do when there really is no definable and single purchase date for a sold asset? I presume they just make something up, same as me?
Of course, this is just one among several weirdnesses lurking in online self assessment. The failure to apply foreign tax credits correctly that started last year appears to now be an annual thing. The limit of 10 interest account worksheets is needlessly arbitrary. And I always particularly enjoy(!) the annual warning about lengthy PDF downloads if using a 28.8k baud modem. Still better than paper, though. :-)
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- Lemon Half
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Re: Why does CGT online self assessment _require_ a purchase date?
TedSwippet wrote:For the Nth year in a row now, I have found myself having to invent a purchase date for some fund units sold for CGT purposes last tax year. HMRC's online self assessment absolutely requires one. But I bought units of this fund monthly over time to cost-average, and as it is all in one big section 104 holding pile, providing a single purchase date is ... well ... impossible. ...
Not doubting you but where is this absolute requirement?
We prepare our own version of the Computation Working Sheet (CWS) (the versions at the foot here aren't compulsory https://assets.publishing.service.gov.u ... s-2018.pdf). Where the original purchase dates are not know and/or there have been prior purchases/disposals, we include Section 104 pool brought forward with no dates provided.
We then prepare a Computation Working Sheet Summary (CWSS), to support the entries on HMRC's Capital gains summary, and upload our CWSS and the CWSs as a single pdf.
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- Lemon Slice
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Re: Why does CGT online self assessment _require_ a purchase date?
PinkDalek wrote:Not doubting you but where is this absolute requirement?
It's in HMRC's own CGT worksheets, within online SA.
I went through an HMRC investigation a couple of years ago, during which they berated me for not supplying a separate description of CGT calculations with my return for the year. That year, as always, I used the worksheets and the online SA claims that these are submitted as part of the return, but HMRC claimed that they had no details of actual disposals. Since then, I've always used the worksheet and included a PDF of my own spreadsheet (with the word 'various' in place of a date for disposals of section 104 holdings) that duplicates all of this.
That is probably overkill, but I would rather that than go through another investigation. It's time consuming and a workload even when, as in my case, no change in outcome.
Anyway... the CGT worksheets part of online SA is where a date of acquisition is absolutely required. Leaving it blank is not an option.
Shrug.
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- Lemon Half
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Re: Why does CGT online self assessment _require_ a purchase date?
TedSwippet wrote:PinkDalek wrote:Not doubting you but where is this absolute requirement?
It's in HMRC's own CGT worksheets, within online SA. ...
I'm fairly certain you can say you want to use your own Computation Working Sheet, as we do as described above, but I haven't logged-on to back check. I took the wording Section 104 pool brought forward direct from our submitted pdf.
We do use HMRC's Capital gains summary though (in a similar online format to this https://assets.publishing.service.gov.u ... 8-2018.pdf).
Edit: That includes at the top You must enclose your computations, including details of each gain or loss, as well as filling in the boxes. but doesn't say our, as in HMRC's.
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- Lemon Quarter
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Re: Why does CGT online self assessment _require_ a purchase date?
HMRC web page where you can report CGT online during the tax year also asks this single purchase date which was fine as I only bought once. It also asked a single sale date - I had two sells so I picked up the later one, then attached a spreadsheet showing both dates.
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- The full Lemon
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Re: Why does CGT online self assessment _require_ a purchase date?
The simple answer is that purchase/acquisition date is not required.
The fact that HMRC documentation may exist that indicates otherwise is irrelevant if, in practice, HMRC has no use for the information. And I can state this with some confidence because, in many years of submitting tax returns with taxable capital gains, I have never provided this data. Moreover I use an established and reputable firm of tax accountants to prepare my return and they have never asked for it nor provided it on my return.
The detail for my taxable gains is provided as an appendix, with column headings for security, date of disposal, proceeds, allowance costs, relief claimed and gain/loss.
There is a place where acquisition date can be entered but it is merely left blank, as is the number of shares/units which is also not provided.
The one case where I did need to provide acquisition date and number of shares is where I had a sale and subsequent repurchase (of a different number of shares) within 30 days. But that is a special case and needed on an exception basis only.
I suspect this is a documentary throwback to when we had indexation.
The fact that HMRC documentation may exist that indicates otherwise is irrelevant if, in practice, HMRC has no use for the information. And I can state this with some confidence because, in many years of submitting tax returns with taxable capital gains, I have never provided this data. Moreover I use an established and reputable firm of tax accountants to prepare my return and they have never asked for it nor provided it on my return.
The detail for my taxable gains is provided as an appendix, with column headings for security, date of disposal, proceeds, allowance costs, relief claimed and gain/loss.
There is a place where acquisition date can be entered but it is merely left blank, as is the number of shares/units which is also not provided.
The one case where I did need to provide acquisition date and number of shares is where I had a sale and subsequent repurchase (of a different number of shares) within 30 days. But that is a special case and needed on an exception basis only.
I suspect this is a documentary throwback to when we had indexation.
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- Lemon Slice
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Re: Why does CGT online self assessment _require_ a purchase date?
I imagine that HMRC want to know the date of acquisition (and sale) so that they can check the purchase and sale prices used if they chose to review the computation. Of course in most cases they don't so the lack of this information isn't spotted and isn't an issue. The information is not necessary to carry out the computation if the purchase is after indexation ceased, as long as there is a record of the purchase and sale values.
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- The full Lemon
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Re: Why does CGT online self assessment _require_ a purchase date?
Gersemi wrote:I imagine that HMRC want to know the date of acquisition (and sale) so that they can check the purchase and sale prices used if they chose to review the computation. Of course in most cases they don't so the lack of this information isn't spotted and isn't an issue. The information is not necessary to carry out the computation if the purchase is after indexation ceased, as long as there is a record of the purchase and sale values.
But what difference would the acquisition date make to the computation that HMRC are reviewing?
Unless the 30-day rule applies, or indexation applies, then it makes no difference. And the declaration of the gain or loss by the taxpayer should already take that into account anyway.
Now of course if HMRC do not believe the CGT declarations then they can do an investigation, and then more information may have to be offered. But that is the case for anything anyway and not specific to CGT. The general rule is to declare the basics and provide more data if and only if HMRC request it.
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- Lemon Slice
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Re: Why does CGT online self assessment _require_ a purchase date?
It is probably a legacy of when the CGT gain/loss was adjusted for inflation.
I always put the date of first purchase.
I always put the date of first purchase.
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- Lemon Half
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Re: Why does CGT online self assessment _require_ a purchase date?
Nocton wrote:I always put the date of first purchase.
That's provided you have records. Stocks purchased "second hand" will always have the original contract note. It's stocks purchased "new" for example as IPO privatisation issues where the documentation you received could be low on salient detail such as "when" and how much you paid. You have to put it together from the allotment letters, remembering the complications of part payments and bonus shares.
Fortunately HMRC don't normally require detail if you self assess that your gain is below the annual exempt allowance.
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- Lemon Quarter
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Re: Why does CGT online self assessment _require_ a purchase date?
And still, in real life, HMRC online CGT reporting tool website required those dates, without them one could not proceed to fill in the form.
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- The full Lemon
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Re: Why does CGT online self assessment _require_ a purchase date?
JMN2 wrote:And still, in real life, HMRC online CGT reporting tool website required those dates, without them one could not proceed to fill in the form.
Then it would appear that HMRC's tool does not reflect its own practices which do allow for a null purchase date.
With multiple purchase dates the concept is meaningless anyway. If you have to put something, state "Various". Or just make up a date.
It seems the main annoyance here is that the tool has been badly programmed and not that the rules require the provision of a data item that does not in any way affect the tax calculation.
Same with number of shares/units. You have to enter a number but you can just enter zero which is what my return does. That obviously makes no sense but, again, HMRC will accept it. Because, again, it doesn't affect the computation.
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- Lemon Half
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Re: Why does CGT online self assessment _require_ a purchase date?
JMN2 wrote:And still, in real life, HMRC online CGT reporting tool website required those dates, without them one could not proceed to fill in the form.
Is this the ‘real time’ Capital Gains Tax service https://www.gov.uk/capital-gains-tax/re ... -gains-tax or something else?
As previously, the HMRC Capital gains summary does not ask for dates of acquisition and taxpayers/agents are free to use their own versions of the Computation Working Sheet to support the entries on the summary. HMRC's version of the latter, which requests dates, being for straightforward calculations.
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- Lemon Half
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Re: Why does CGT online self assessment _require_ a purchase date?
Lootman wrote:… With multiple purchase dates the concept is meaningless anyway. If you have to put something, state "Various". Or just make up a date. ...
For the Trust Register, where date of birth is not known for, say, the settlor, the advice is to put 01/01/1900 as "various" will not work.
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- Lemon Slice
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Re: Why does CGT online self assessment _require_ a purchase date?
Lootman wrote:Then it would appear that HMRC's tool does not reflect its own practices which do allow for a null purchase date. ... It seems the main annoyance here is that the tool has been badly programmed and not that the rules require the provision of a data item that does not in any way affect the tax calculation.
^ This.
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- Lemon Half
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Re: Why does CGT online self assessment _require_ a purchase date?
Lootman wrote:It seems the main annoyance here is that the tool has been badly programmed
I've had trouble in the past as to what the required input was for an empty field. Was it null, space, 0 or something else? The solution wasn't obvious and it took several attempts to clear the resulting error message.
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