The Real Time Capital Gains Tax Service is one of two options for paying your Capital Gains Tax (CGT) bill. HMRC has established a “Real Time” Capital Gains tax Service to assist individuals in reporting the disposal of many assets subject to CGT. This eliminates the need for that individual to register for Self Assessment if they are not otherwise needed to file a tax return.

Essentially, if you sell an asset (property, stock, art, cryptocurrencies, etc.) for a profit, you have two choices:

  • You can either file a Self Assessment tax return – by January 31st of the following tax year – or you can file a Corporation tax return.
  • You make use of HMRC’s Real Time Capital Gains Tax Service and pay the tax bill within 30 days.

What can you do with it?

You can notify HMRC of any gains on shares or personal possessions by using the RT CGT Service. There is one exception: you cannot use the service to report gains on UK property – there is another service available for this purpose.

What is Capital Gains Tax?

When an individual sell or pass on a private asset that has appreciated in price, he/she must pay Capital Gains Tax. If they buy an item and then ‘dispose of’ it for more than its original price, they must pay tax on the gains – that is, the profit they make from selling the asset, not its total value.

Types of gains an individual can report

  1. Share Gains

Over the last few years, the percentage of UK residents investing in shares or investment portfolios has increased. As a result, more people will have profits to report if they make the decision to cash in their investment.

If you sell some or all of your investment for a profit, you may be required to pay CGT. This includes shares not held in an ISA, unit trust units, and certain types of bonds. It’s important to note at this point that if you do sell and lose money, you should keep track of it. Why is this so? Because you may be able to deduct it from future gains.

  • Gains on personal possessions

Capital gains tax applies to more than just stocks and real estate. For example, you could be hoarding valuable personal possessions such as jewellery, paintings, antiques, or even coins and stamps. If you sold any of these possessions for more than £6,000, you would be required to report any profit to HMRC.