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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Capital sums derived from assets: section 22(1) TCGA 1992: extra statutory concession D33 amended from 27 January 2014: Claims received before a return is due

An individual or company receiving a payment of more than £500,000 on the disposal of a right of action in circumstances that do not involve an underlying asset can make a claim to HMRC for the amount above £500,000 to be exempt. The exemption claim can be made to HMRC once the amount of the sum is known to give the individual or company certainty regarding the tax treatment of the sum above £500,000 when they come to complete a tax return.

Action on receipt of a claim

Where a claim is received in advance of a return HMRC aims to provide a decision within 30 working days. Where it will take more than 30 working days to provide a decision the reviewer should contact the claimant to agree a date by which the decision will be provided.

If the reviewer needs to request further information from the claimant then the clock will stop on the date the reviewer requests the information. The clock then starts up again when the information is received by HMRC. It is therefore very important that a claim is looked at as soon as possible after receipt to establish early on if there is a need to go back to the claimant.

Action after the claim is checked

Once the reviewer has reached a decision the claimant should be informed in writing of the decision. As the claim relates to the application of an extra statutory concession the claimant has no right of appeal against the reviewer’s decision. This does not affect the claimant’s right to complain to HMRC if they are unhappy with how they have been treated in relation to their claim. The reviewer needs to make the claimant aware of their rights and should include the complaints factsheet C/FS with the decision letter.

If the claimant has already submitted a return this may need to be amended. If this is the case the reviewer should inform the claimant of the need to amend their return either within 90 days of the date the claim was rejected or the statutory time limit for making an amendment (whichever is the shortest period). The claimant’s record should then be noted to ensure that the expected amendment is received. If the amendment to the return is not received, normal follow up action to pursue the amendment should be taken.