Capital gains tax on mixed use property

We have a property which is 1/3 commercial and two thirds residential following a change of use. We know we have to complete the CGT on the residential element within 60 days, so the clock is ticking. We have several complications; 1. My husbands earnings may change between now and the end of the tax year because he has applied to work 4 days a week, this is expected to start in the new year, do we declare earnings as they are now, or as they should be if he changes to a 4 day week from January? 2. We have been letting the premises up to the date of sale, do we have to calculate the income from property and include that in the expected income for the year? 3. Dependant upon the answer to number 2 - My income is very low, do we have to declare the income from property as 50%, (which is what we usually do) or can I declare a higher % as my income from property. Also does CGT have to be declared at 50% each, or can it be an uneven %.

Hi CGT TAX,

1. You will need to make a guess at what you will earn based on the reduction in hours    
2. Yes you need to include rental income received    
3. If the property is jointly owned, then yes it needs to be declared 50/50 as does the gain unless you have already provided a claim
for an alternative split of  any beneficial interest
Thank you.

Many thanks for your prompt and concise response, If we make a guess at the earnings, and they are higher than we expect, would we incur a penalty for under declaring the residential CGT even though we estimated our income in good faith? Would we be wiser to declare the higher amount of employment income for the residential portion within the 60 days and hope that we may be due a repayment if we have over quoted our income when we complete our tax returns for 2023 - 2024. Does the HMRC system have the means of ascertaining if someone has paid too much CGT and is the customer notified in that instance? Thanks in anticipation, your have helped far more than the 45 minute phone call I made which resulted in my call being cut off by the agent when trying to transfer me.

Sorry, I have another question having tried to complete a CGT report for the residential element. Can you please confirm whether we should be reporting the residential portion now and the commercial portion through the 2023 - 2024 tax return, or whether we should complete the online CGT return for the whole sum but make a calculation for the CGT due on the commercial part of the building and put an amended figure into the the CGT return with the estimated figure. I have called the helpline more than once and been been given conflicting information on the correct way to do report the gain. The advise notes are confusing, they imply that we can report the mixed use through the online GGT system, but I cannot find anything which calculates the CGT return based upon a 20% tax rate, which is what I assume the commercial unit will have as the residential element will have taken us both over the threshold into the higher tax rate.

Hi CGT TAX,
When completing the online PPDCGT return withing 60 days, you will have to estimate your income, to work out if any of the lower rate of capital gains tax is availble.    
Where you do not need to complete a self assessment tax return and if you discover at a later date, that you have over or under estimated your income, you can log in and
amend the PPDCGT return accordingly.  Where an amendment means the capital gains is underpaid, then there may be late payment penalties and interest, depending on
the amount of unpaid tax.  If you are required to complete a self assessment tax return, you should declare the capital gain and the tax already paid.  Any further tax due,
will be paid via self assessment and should be paid by the due date of 31 January.  Payment received after this date may be subject to late payment penalties and interest charges.
Thank you.

Hi,
The disposal of residential property and land on or after 27 October 2021, must be reported and the gain paid within 60 days of the completion date, otherwise penalties and interst charges will be imposed.  
This can be done online at:
Report and pay your Capital Gains Tax or with a paper capital gains return form where the individual is prohibited from declaring online.  
If you have other capital gain to report for 2022 to 2023 & 2023 to 2024, a different service can be used at:
Report and pay your Capital Gains Tax.  
You must report by 31 December in the tax year after you made your gain and pay by 31 January. For example, if you made a gain in the 2023 to 2024 tax year, you need to report it by 31 December 2024 and pay by 31 January 2025.  
Reporting after the due date must be by self assessment tax return.
Thank you.