
‘In year’ 2024/25 Trust and Estate returns
HMRC have asked us to pass on the following message about filing in-year returns for trusts and estates. Given the changes to CGT rates for non-residential disposals on 30 October 2024, trusts and estates which need to pay the new rates of CGT are being asked not to file 2024-25 returns until after 5 April 2025.
Background
Trust and estate advisers may be familiar with filing ‘in-year’ returns – by which we mean tax returns which are submitted before the end of the tax year to which they relate. This may be done when a client has died, an estate has been wound up or a trust has closed. Filing early on paper, before the 5 April, can help to bring the affairs of the individual, estate or trust to conclusion more quickly. Generally a paper version of the previous year’s return is used, with manual amendments made on the face of the return to show the year which is being reported.
HMRC will continue to accept ‘in-year’ returns for individuals who have died and who are reporting using an SA100 even if there is CGT involved - but it would be helpful for HMRC if agents/taxpayers could identify any disposals on or after 30 October 2024 which need to be taxed at 18/24% and include their calculations.
Estates reporting informally can continue to report ‘in-year’. However, trusts and estates using the ‘formal’ reporting method and submitting SA900 returns which have non-residential CGT disposals after 30 October which are being asked to wait until the 2024-25 SA900 return is published to ensure that the correct rate of CGT is applied.
Message from HMRC:
I am contacting you following the changes announced by the government at Autumn Budget 2024 to the rates of Capital Gains Tax (CGT).
Trustees/Personal Representatives (PRs) have previously been able to file in year Self-Assessment Returns (SA905) using the previous tax years form under ‘a collection and management measure’. Due to the in-year change for the 2024-25 tax year only, for customers with disposals on or after 30 October 2024, a manual workaround will be required to ensure the new rate of tax is correctly accounted for in the return. This will involve using an adjustment box which has been added to the SA905 to account for the in-year difference in tax.
Therefore, use of the 2023/24 tax return for 2024/25 will cause an issue for some customers, as the return does not have the ability to capture the two rates of CGT, so we cannot accept some in year returns.
We can accept 2024/25 in year returns that have:
- UK property disposals only as there is no change to the CGT rate
- Any disposals made before 30 October 2024
We cannot accept:
- any return with multiple main rates of CGT for disposals on or after 30 October until the 2024-25 return is available in April 2025. Returns that have already been sent will be returned to trustees/PRs.
An adjustment tool will be available alongside the updated 2024/25 return to support a trustee/PR to calculate the correct adjustment figure.
If members have any comments or concerns about these provisions, please let us know on [email protected].