Does anyone know if it is possible to pay cgt over time? Due to partners business, we don't have a lump sum just sitting in the bank waiting to be paid, and the accountant is pushing us to do it in one go.
CGT is payable on 31 January following the preceding tax year in which the gain arises. The best you can do is call HMRC and ask to pay in instalments. Obviously paying this way will mean you will pay interest. Just don't leave it.
No I know, I'm fully intending on getting it sorted out now and finding the means to finance it, while i still have about six months, whether HMRC agree to the instalments, or they become awkward sods and we have to see if we can mortgage- the property was bought outright. In all honesty, OH is getting in a tiz about it before he's even spoken to them, understandable because it was due to a farm sale and the cgt figure could be a six figure amount. I really hope HMRC go for it, OH is spiralling back towards depression again after the conversation with the accountant.:(
Was the farm sold in it's entirety as a going business? There may be some reliefs available if so. Did you not expect to pay Cgt? What type of property were the proceeds used to buy?
No I know, I'm fully intending on getting it sorted out now and finding the means to finance it, while i still have about six months, whether HMRC agree to the instalments, or they become awkward sods and we have to see if we can mortgage- the property was bought outright. In all honesty, OH is getting in a tiz about it before he's even spoken to them, understandable because it was due to a farm sale and the cgt figure could be a six figure amount. I really hope HMRC go for it, OH is spiralling back towards depression again after the conversation with the accountant.:(
what happened to the money? If it was re-invested you can get a lot of the CGT deferred as hold-over relief depending on how it was re-invested.
The general opinion of HMRC is that however, as you've had the proceeds, you have the funds to pay the tax.
what the accountant will do is advise you to talk to the revenue and sort out a payment plan as when needed.
What the accountant won't want to is to play piggy in the middle bargining the details of it.
Many people leave their tax affairs entirely in the hands of their accountants and if they're getting paid most accountants are very happy to play 'piggy in the middle' in my experience. It's paid work!
I would expect a lot more than that from my accountants.
The accountant will advise you how and what to pay and try to limit any payment. They'll write to the Revnue and try to get a payment plan in place of course as well.
But then final terms of that payment have to be agreed between the client and the Revenue. They won't want to be drawn into the bargining of it, as the final agreement has to be between those parties.
The accountant will advise you how and what to pay and try to limit any payment. They'll write to the Revnue and try to get a payment plan in place of course as well.
But then final terms of that payment have to be agreed between the client and the Revenue. They won't want to be drawn into the bargining of it, as the final agreement has to be between those parties.
There's a lot more to it than that, the accountant should be in a position to advise about alternative sources of funding.
Mortgage
Business Loan (assuming the OP has a business) - the interest payable on this may be tax deductible.
Personal (unsecured) loan.
I'm afraid I don't really know the ins and outs of it, OH and the accountant usually sort it out between them.
I'll give yourselves the whole story to put into context.
Effectively what happened was, the original farm was sold, new farm offered as part ex, along with cash, to pay off ex wife and buy somewhere for grown up son and family. (acrimonious divorce)
We originally had allocated the money to one side to clear off the cgt when it became due this coming January, except OH felt really guilty of cheating son out of his inheritence, (mothers greed to take ex hubby to the cleaners) so set up agricultural contracting business. Big tractors, trailers, the like. As its only in its second year its still getting on its feet, and so money is being ploughed left right and centre into it, so the funds of course have depleted cos the tractors are still on finance, plus the son's wages each month. Farmers arent very quick at paying up either. You no doubt see the problem.
As far as I can understand, and i don't know how true, if at all, the business is what is keeping cgt a a reduced rate that it is, rather than the full whack,
I didn't hear the conversation with the accountant, apart from OH coming into the room in a panic going 'i need to pay the whole lot in January' he being of the belief that HMRC offered 'payment over time' as a general option. I assume he must have heard this from the accountant originally when the sale first went through.
I don't know anything about the business offsetting tax or anything like that. It's probably naivety on my part for thinking thats what we pay an accountant for.
I'm afraid I don't really know the ins and outs of it, OH and the accountant usually sort it out between them.
I'll give yourselves the whole story to put into context.
Effectively what happened was, the original farm was sold, new farm offered as part ex, along with cash, to pay off ex wife and buy somewhere for grown up son and family. (acrimonious divorce)
We originally had allocated the money to one side to clear off the cgt when it became due this coming January, except OH felt really guilty of cheating son out of his inheritence, (mothers greed to take ex hubby to the cleaners) so set up agricultural contracting business. Big tractors, trailers, the like. As its only in its second year its still getting on its feet, and so money is being ploughed left right and centre into it, so the funds of course have depleted cos the tractors are still on finance, plus the son's wages each month. Farmers arent very quick at paying up either. You no doubt see the problem.
As far as I can understand, and i don't know how true, if at all, the business is what is keeping cgt a a reduced rate that it is, rather than the full whack,
I didn't hear the conversation with the accountant, apart from OH coming into the room in a panic going 'i need to pay the whole lot in January' he being of the belief that HMRC offered 'payment over time' as a general option. I assume he must have heard this from the accountant originally when the sale first went through.
I don't know anything about the business offsetting tax or anything like that. It's probably naivety on my part for thinking thats what we pay an accountant for.
It's not naivety at all - you pay him to receive qualified professional advice and as you have already seen you won't get that here.
Also he is therefore aware of your entire financial and tax situation so I would advise a meeting with him to thrash out your options.
If he's no help, look for another accountant - I did and ended up saving a fortune in tax, having paid too much in earlier years due to bad advice.
It sounds superficially like there may be options for enrepreneurs relief (bringing the rate down to 10%), also rollover relief because of the investment in the new agricultural business, but as JulesandSand says the whole situation needs to be known and can't be done here.
It's not naivety at all - you pay him to receive qualified professional advice and as you have already seen you won't get that here.
Also he is therefore aware of your entire financial and tax situation so I would advise a meeting with him to thrash out your options.
If he's no help, look for another accountant - I did and ended up saving a fortune in tax, having paid too much in earlier years due to bad advice.
I think you're right. There's still paperwork that needs submitted so the accountant can work out the exact figure, but its quite clearly something where a phone conversation isn't sufficient. I keep hearing about people offsetting business expenses against tax and the like and hoping it would apply to try and bring the bill down further, but it doesn't appear to be the case here.
Comments
Have you made him aware you don't have the ready cash?
what the accountant will do is advise you to talk to the revenue and sort out a payment plan as when needed.
What the accountant won't want to is to play piggy in the middle bargining the details of it.
what happened to the money? If it was re-invested you can get a lot of the CGT deferred as hold-over relief depending on how it was re-invested.
The general opinion of HMRC is that however, as you've had the proceeds, you have the funds to pay the tax.
I would expect a lot more than that from my accountants.
The accountant will advise you how and what to pay and try to limit any payment. They'll write to the Revnue and try to get a payment plan in place of course as well.
But then final terms of that payment have to be agreed between the client and the Revenue. They won't want to be drawn into the bargining of it, as the final agreement has to be between those parties.
There's a lot more to it than that, the accountant should be in a position to advise about alternative sources of funding.
Mortgage
Business Loan (assuming the OP has a business) - the interest payable on this may be tax deductible.
Personal (unsecured) loan.
Only in general ways. Accountants generally can't advise on actual products as they aren't IFA's (unless they are set-up that way)
It's unlikely that a business loan for it would be tax-decductable, as it wasn't for the purposes of the trade.
I'll give yourselves the whole story to put into context.
Effectively what happened was, the original farm was sold, new farm offered as part ex, along with cash, to pay off ex wife and buy somewhere for grown up son and family. (acrimonious divorce)
We originally had allocated the money to one side to clear off the cgt when it became due this coming January, except OH felt really guilty of cheating son out of his inheritence, (mothers greed to take ex hubby to the cleaners) so set up agricultural contracting business. Big tractors, trailers, the like. As its only in its second year its still getting on its feet, and so money is being ploughed left right and centre into it, so the funds of course have depleted cos the tractors are still on finance, plus the son's wages each month. Farmers arent very quick at paying up either. You no doubt see the problem.
As far as I can understand, and i don't know how true, if at all, the business is what is keeping cgt a a reduced rate that it is, rather than the full whack,
I didn't hear the conversation with the accountant, apart from OH coming into the room in a panic going 'i need to pay the whole lot in January' he being of the belief that HMRC offered 'payment over time' as a general option. I assume he must have heard this from the accountant originally when the sale first went through.
I don't know anything about the business offsetting tax or anything like that. It's probably naivety on my part for thinking thats what we pay an accountant for.
It's not naivety at all - you pay him to receive qualified professional advice and as you have already seen you won't get that here.
Also he is therefore aware of your entire financial and tax situation so I would advise a meeting with him to thrash out your options.
If he's no help, look for another accountant - I did and ended up saving a fortune in tax, having paid too much in earlier years due to bad advice.
I think you're right. There's still paperwork that needs submitted so the accountant can work out the exact figure, but its quite clearly something where a phone conversation isn't sufficient. I keep hearing about people offsetting business expenses against tax and the like and hoping it would apply to try and bring the bill down further, but it doesn't appear to be the case here.