HMRC thinks I may owe CGT but I don't. Ignore?

[winkleman]

HMRC has written to me a couple of times because they think I may owe CGT on the sale of a house. The letter says that if I don't owe anything I don't need to do anything, so I ignored the first letter. However, if they're going to keep writing to me, then I feel I need to explain why I don't owe it. I don't want to phone them as I know their waiting times are notoriously long. There is no email address provided, so I have drafted a snail-mail letter explaining the circumstances and offering to send proof if required. Is this the right thing to do?

Context: The house was jointly inherited by me and my brother, and he renounced his executorship to enable me to handle everything so, although the house sale was in my name, the proceeds were shared equally. There was a small gain above the probate valuation but my share was within my annual CGT allowance. I'm a basic rate tax payer so don't normally do an annual tax return. Should I have done one to declare the capital gain?

(I know my brother provided details of his share to his tax accountant, so that would have been declared in his annual tax return).

I believe this is called a nudge letter. The tone of them is quite accusatory on purpose to nudge people to pay up cgt, but only if they are due it. If you calculate that you do not owe cgt then you can ignore it. Personally I would ignore it and not bother explaining or contacting them. HMRC issue thousands upon thousands, and they are triggered by a range of data they are plugged into - in this case it's probably a land registry datafeed and it's matched against a property sale that was in your name but wasn't registered as your main home, so it's triggered a letter.

Just to add, re your question about if you should have completed a tax return even though there's no cgt, my understanding is no you don't need to - the tax return and also the property sale notification process for cgt is only if there is tax payable on the sale.