CG13700 | Introduction and computation: claims and elections

This page covers some basic points on the general mechanics of claiming reliefs, allowances, and so on and is focused mainly on reliefs and allowances under the Taxation of Chargeable Gains Act 1992 or which work by reference to an allowable loss.

This page is not intended to replace the detailed guidance on self-assessment procedures, claims and elections which are mainly contained in the Self Assessment Claims Manual, the Enquiry Manual and the Self Assessment: the legal framework manual. In addition, there is further guidance on claims and elections for companies in the Company Taxation Manual at CTM90600.

Claims and elections have different functions, and it can be important to understand whether you are dealing with a claim or an election, since some legislation only applies to one or the other.

See SACM2000 to find out about the differences between claims and elections.

Some extra statutory concessions allow customers to make claims. Such claims, and any consequential claims, are dealt with in the same way as claims allowed by statutory provisions.

How should a claim be made?

See SACM3015 to SACM3030 and CTM90600.

Most claims and elections that can be made in a return, or by amending a return, must be so made when a notice calling for the return has been given. If a claim or election is made other than in a return, for example if one is made before notice calling for a return was given, or after the time allowed to amend the return has passed, the rules in Schedule 1A of the Taxes Management Act 1970 and Schedule 1B of the Taxes Management Act 1970 will apply.

When is a claim or election made?

A claim or election is made when it is received by HMRC – not when it is signed, or dated, or posted.

What information does a claim or election need to include?

Some claims and elections have a specified form or format which must be used. Others don’t have a specified form or format and can be made in any form the customer chooses.

The relevant legislation and capital gains manual pages relating to a specific claim or election will provide further detail about any specific information that needs to be provided, but as a rule a claim or election must state both:

• the customer’s name and their Unique Customer Reference (UTR)

• the claim or election that is being made

A claim or election must also give sufficient information to give effect to the claim or election. This is likely to include:

• the tax years the claim or election relates to

• the assets subject of the claim or election

• quantification of the claim or election, see SACM3025

• any values to be used

These lists may not be exhaustive. It is important to consider the statute and guidance to determine the information that needs to be provided for the claim or election that is being made.

If the claim is made as part of the tax return, the white space notes should be used to provide details of the claim.

If the claim is sent outside of a tax return, it must also include a declaration to be signed by the claimant or the person claiming on their behalf, which states that the particulars given in the claim are correct and complete to the best of their knowledge and belief. Where relevant, HMRC would also expect the claim to be supported by a document which shows that the tax charge to which the claim relates has been paid. SALF605 explains the procedures for making a claim other than in a tax return.

SALF603 provides more information about claims, elections and notices included in a tax return.

SALF604 provides more information about claims, elections and notices not included in a tax return.

See SACM4000 for information about what records and information must be kept when making a claim.

It is not possible to make a provisional claim. SACM5000 provides more details about this and covers the one exception to the rule. It should, however, be noted that roll-over relief allows for a declaration to be made to obtain provisional relief, see CG60310.

See Schedule 1B of the Taxes Management Act 1970 and SACM11000 (or CTM90630 for companies) for information about claims involving two or more years.

Consequential claims after assessment and amendment

The legislation allows a customer to make various out-of-time actions where HMRC makes a discovery assessment or amends a return in an enquiry closure notice, see SACM9000 or CTM90650 for companies.

Amending or correcting claims

Claims may be amended or ‘corrected’ by the person making the claim or by HMRC, see SACM3040, SALF606 and SALF610.

Making enquiries into claims or elections

See SACM8000 and SALF609.

Withdrawing an irrevocable election

Some elections are irrevocable. Withdrawal of such elections can only be allowed by the Board under its collection and management function at section 1 of the Taxes Management Act 1970. If HMRC staff receive a request for a withdrawal of an irrevocable election they should find out why the customer wishes to withdraw the election and seek support from the Capital Gains Technical Team.

Time limit for making a claim

The legislation has a general default rule giving the time within which a claim may be made in the absence of any specific time limit see section 43 of the Taxes Management Act 1970 and SACM3035, or paragraph 55 of Schedule 18 of the Finance Act 1998 and CTM90610 for companies. However, many claims have a specific time limit. Where a specific time limit applies to a claim or election, guidance is given in the relevant part of the capital gains manual.

Time limit for making an election

There is no general time limit for making an election but the legislation governing an election may include a specific time limit. If there is no specific time limit for an election then, in theory, an election may be made at any time. But there will in practice usually be an implicit time limit, because once it is too late to revise a customer’s liabilities by adopting an alternative basis of computing a chargeable gain, any election will have no practical effect.

Extended time limits for claims and elections

In certain circumstances claims and elections may be made after the normal statutory time limit has passed. The time limit may be extended where:

• an assessment is made by HMRC, or

• a self-assessment is amended by HMRC, or

• an enquiry is concluded by a contract settlement.

When a discovery assessment under section 29 of the Taxes Management Act 1970 is made, customers may get a second chance to make some claims and elections, see SACM9005, or CTM90645 to CTM60665 for companies.