HMRC targets second home sales

People that haven’t paid tax on profits from the sale of second homes face fines and prison as part of the latest campaign against tax evasion by HMRC.

The property sales campaign is aimed at those selling homes in the UK or abroad, where CGT should be paid on any profits made, including properties people have sold that were given to them, and the sale of holiday homes.

People will have until 9 August to tell HMRC about any unpaid tax on property sales, and until 6 September to pay the tax owed.

After 6 September, HMRC will take a closer look at the tax affairs of those who have sold properties other than their main home, but who appear to have paid no CGT.

Those who come forward voluntarily will pay a lower penalty than if HMRC approaches them first.

Continued...

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Comments
JAADAMS's picture

As a reminder.. an article loaded a week ago to add to this!

JAADAMS | | Permalink

http://www.accountingweb.co.uk/article/how-hmrc-chooses-property-tax-evasion-cases-investigate/538223 

HMRC's Property Tax Campaign:- The Lowdown.

These articles are two of a series that are being written about Property Tax - PPR; CGT; IHT etc etc.

More to follow!

 

Help rather than stick    2 thanks

stephenfarra | | Permalink

There are many people who do not realise that CGT is payable on second homes. Is it reasonable to expect sellers to find their way through HMRC web to look for a topic that they maybe did not know existed. It would be more helpful to introduce a mechanism to bring it to their attention either at point of sale or when the property is put on the market. When are we going to stop penalising for deemed knowledge where it can be avoided. The French pay their CGT as part of the sale, we could at least report there is a potential liability at the same point which can be picked up by solicitors from their questions pack.

Rolll over darling

ken of chesterl... | | Permalink

1 I would think HMRC would be likely to look for undeclared rent as well as cgt..Is this not the case?

2.All property sales should be subject to cgt except for forced sales, such as care home fees.. The gain is then rolled over on reinvestment, and of course there is no cgt on death. I think this is the situation in America, or used to be.

3. The problem doesn't just apply to second homes, does it? Suppose A sells half his  practice,  then rolls the gain over on a property he uses as an office. He retires, moves into the property, thereafter the property becomes the only or main residence of himself and his wife, and is consequently exempt.  He lets his former residence and gets limited exemption. He dies, and his widow sells the property in order to move into the previous property.  A wife inherits the cgt history of her husband on any property transferred to her. She is of course unaware that there is a gain rolled over on the house, and if she is aware she would not know how to calculate it.  It would be unethical to ask whether HMRC would spot it after 10 to 15 years, but there must be many situations where there are latent gains due to ancient roll over relief, held over gains and all those clever things with trusts. we read about inTaxation waiting to  bite someone. .