Updated guidance on where to send form CG34
HMRC has updated the procedures for its post transaction valuation check (PTVC) service. This is available to anyone who has had to value an asset for a capital gains calculation and wants to check the value with HMRC before completing a tax return.
We mentioned this in our news item last week CGT procedures under review. Here we give some more information. The main changes are about where to send the application, plus clarification of time limits and what to do if HMRC has not replied before the tax return is due.
How post transaction valuation checks work
The advantage of a PTVC is that if HMRC has agreed the valuation of an asset, it will not challenge the use of that valuation in a capital gains calculation in a tax return.
PTVCs are offered to all taxpayers – individuals, trustees and companies.
Timing is important – the taxpayer can only apply for a PTVC:
- after the date of the disposal relevant to capital gains tax (or for companies, to corporation tax); and
- before the date by which the taxpayer has to complete the self assessment tax return.
To apply to have a valuation checked the taxpayer should complete form CG34 Application for post transaction valuation check.
HMRC will check the details on the CG34 and let the taxpayer know if it:
- accepts the value provided; or
- requires further information; or
- suggests an alternative value.
Full details about the process are on the Shares and Assets valuation page on the HMRC website and on the CG34 form.
Where to send the CG34 form
Changes to PTVC procedures were announced in Working Together Bulletin 38 (November 2009). The guidance on where to send the CG34 form is now as follows:
Individual taxpayers dealt with by HMRC’s High Net Worth Units, Trust Offices or Public Department 1 should send the completed CG34 to those offices.
Other individuals, partnerships and personal representatives should send the completed form direct to the Capital Gains Team in Cardiff at:
The Capital Gains Team (Individuals & Public Bodies)
16 West
Government Buildings
Ty Glas Road
Llanishen
Cardiff
CF14 5FP
Confusingly the form CG34 still incorrectly asks for it to be returned to the local office rather that the addresses given above. We have pointed this out to HMRC.
Companies are not mentioned in WT Bulletin 38. We have asked HMRC to clarify where companies should send their CG34s. In the meantime, we suggest you check what to do with the tax office which handles the company’s affairs.
How much time should you allow for a PTVC?
The CG34 indicates that HMRC expects to take at least 56 working days to deal with any application and therefore all applications for a valuation check should be submitted at least two months before the tax return filing deadline.
What happens if HMRC has not agreed the value before the tax return is due in? The new guidance states:
“SAV's valuer will try to complete the valuation process quickly. But, sometimes it will not be possible to agree values before you have to send in your tax return, which must be done by the due date, whether or not SAV have completed the valuation check.
“You should enter the amount of the gain (or loss) that you expect SAV to agree from the valuation on your tax return.”
The Tax Faculty would like your feedback
We intend to clarify a number of points about the above procedures with HMRC, in particular regarding CG34s that are submitted less than 56 days before the filing deadline or where HMRC cannot complete the work by that deadline. Reports received suggest that HMRC will stop work on valuations as soon as the tax return is filed, and that an application filed less than 56 days from the normal filing deadline will not be looked at.
We should like to hear members’ views on any aspect of the new CG34 processes. Please post your comments below or email angela.williams@icaew.com.