HMRC have spent the past couple of years launching taskforces to recover unpaid taxes. Earlier in the year, they announced that their latest target was people who have sold a second property…..and the deadline is now fast approaching.
Although there is no tax when you sell your residential home, there is Capital Gains Tax due if you sell any other property in the UK or abroad, eg a holiday home or a rental property. However, a number of people don’t declare this to HMRC and don’t pay the taxes due.
Sometimes this is to avoid the tax on property sales but, in many cases, it’s simply because they don’t realise that there is any tax on property sales. For example, did you know that giving a property to your children can trigger a property tax charge?
HMRC are giving you until 9 August to come forward and declare any profits on selling properties, with a 6 September deadline to pay the tax on property sales. Until this date, they’ll offer reduce penalties and fines.
If you don’t come forward, HMRC will apply increased fines and, potentially, criminal prosecution.
How will HMRC find me?
If you’re wondering how they will track people down, HMRC actually hold the database for all property sales with Stamp Duty Land Tax. Therefore, they’re going to compare this to the Capital Gains Tax records and investigate any gaps.
Therefore, if you have sold a second property and haven’t paid the tax, it’s worth speaking to HMRC now.
Not sure whether this applies to you? Speak to us
If you’re not sure whether this is relevant to your property sale, or want any other advice, please please contact us on 0151 724 3960 or by email at [email protected].
Alternatively, you can use our website contact form.
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Added by Jon Davies