Taxman warns: “Time running out to disclose 2nd property tax”

HMRC issued a warning this week to people who have sold properties which are not their main homes, and have not told HM Revenue and Customs about any profit, that they have one month left to make use of the Property Sales Campaign disclosure opportunity.

HMRC’s Property Sales Campaign is the latest in their series of Tax Disclosure Campaigns,  and is aimed at those selling second homes in the UK or abroad where Capital Gains Tax (CGT) should be paid.  It includes properties that were rented out and holiday homes.  Taxpayers have until 9 August to tell HMRC about any unpaid tax on such property sales, and until 6 September to pay the tax that they owe.   HMRC say that by using the campaign to come forward voluntarily, people will receive the best possible terms, and any penalty will be lower than if HMRC approaches them first.

After 6 September, HMRC will take a much closer look at the tax affairs of people who have sold properties other than their main home, but who appear to have paid no CGT.  They will use information they hold about property sales in the UK – and abroad – to identify people who have not paid what they owe. Penalties – or even criminal prosecution – could follow.

HMRC say “people do not have to be concerned about the sale of their main home (or private residence) as this is usually exempt from capital gains tax. This exemption may not apply, however, when it has not been their only home or main residence for some time, or they have used it for business, including letting the property, or they have sold part of the garden”.

HM Revenue and Customs holds the database for all property disposals attracting Stamp Duty Land Tax.  Once the campaign disclosure period closes, HMRC will compare this data with people’s tax records to establish whether they have told HMRC about the sale or disposal of second and holiday homes, and will launch a tax investigation into those they suspect of cheating.

How can Lynam Tax Investigation Experts help me?
Lynam Tax partners have a vast amount of practical experience in managing tax investigations and tax enquiries.    We can advise you on the best course of action and if appropriate, help you manage any necessary disclosures, in order to obtain the optimum outcome for you, your business and your family.

*For a free, private, no obligation consultation, call Paul Lynam today on:  0845 643 9997
or Andrew Nutbrown on:  07718 778710