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HMRC internal manual

Capital Gains Manual

Capital sums derived from assets: section 22(1) TCGA 1992: extra statutory concession D33 amended from 27 January 2014: claims received with a return

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. Some individuals or companies may choose to make the claim with their tax return and complete the return on the assumption that the claim will be accepted by HMRC.

Action on receipt of a claim

Where a claim is received with a return it is likely that the figures on the return will be based on HMRC accepting the claim. The reviewer will need to consider if the return can be accepted on the information provided or if further information is required. If additional information is required, HMRC will open an enquiry into that return to gather any further information needed. The normal time limits for opening an enquiry into a return apply.

Action after the claim is checked

Once the reviewer has reached a decision it is mandatory to refer the claim to the Capital Gains Technical Group to authorise the exercise of the Commissioner’s collection and management powers.

If the claim is accepted and an enquiry wasn’t opened into the return then no further action will be necessary.

If an enquiry into the return was opened it should be settled in the usual manner. If the claimant does not agree with the reviewer’s decision HMRC may need to issue a Revenue Assessment (for Income Tax) or a Revenue Determination (for Corporation Tax). Although the decision relates to the application of an extra statutory concession, the claimant will have the usual right of appeal against any notice issued by HMRC.