People who have sold properties that are not their main homes, and who have not told HMRC about any profit made, will become the focus of the Property Sales Campaign. It is aimed at those selling homes in the UK or abroad, where Capital Gains Tax (CGT) should be paid on any profits made. This includes, for example, properties people have sold that were given to them, and the sale of holiday homes.
HMRC says that people have until August to tell the tax man about any unpaid tax on property sales, and until September 6 to pay the tax owed.
After that, HMRC will take a much 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. As with other campaigns, HMRC dangles the carrot to those who come forward voluntarily, by offering the best possible terms, as any penalty they pay by coming forward voluntarily will be lower than if HMRC comes to them first.
Marian Wilson, Head of HMRC Campaigns, said: “Some people will not understand that selling a second home, a holiday home or a property disposed of as a gift could attract Capital Gains Tax. They need to look at our website or contact us. Telling HMRC about your tax liabilities is simple and straightforward, and help, advice and support are available.
“It is better to come to us before we come to you. After the opportunity closes on September 6, HMRC will use information it holds 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.”
People need not be concerned about the sale of their main home 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 throughout, or they have used it for business purposes, including letting the property, or they have sold part of the garden.
HMRC says it holds the database for all property disposals attracting Stamp Duty Land Tax. Once the campaign disclosure period closes, HMRC will compare this property disposal data with people’s tax records to establish whether they have told HMRC about the sale or disposal of second and holiday homes.
Campaigns have so far raised £547 million from voluntary disclosures, and nearly £140 million from follow-up activity, including 20,000 completed investigations. HMRC campaigns have targeted offshore investments, medical professionals, plumbers, VAT defaulters, coaches and tutors, electricians, online traders and higher rate taxpayers with outstanding tax returns. There are also 13 criminal investigations underway, with five convictions already secured.
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Susie Hughes © Shout99 2013