Buy to Let Landlords Beware

Posted on Friday, April 19, 2013

HMRC have declared that they are still working to uncover any unpaid tax accumulated from second home property sales.

This is not the first warning issued from HMRC, as they endeavour to reiterate the message that all individuals who have sold properties which have served as second or holiday homes in the UK and abroad have not yet declared their Capital Gains Tax (CGT) will be penalised.

The main aim of the campaign focuses on exposing those who have sold a property which does not serve predominant purpose as being a main home, and have gained profit exceeding the annual CGT limit of £10,600. This unpaid 'gained' tax is what HMRC is aiming to recover.

So far, HMRC have been quite tolerant of those holding undisclosed taxes. However with the closing date for people to voluntarily turn in their profits drawing near, they have recently resorted to sending guilty individuals penalty letters. In light of this, it has been suggested that those who do come forward of their own accord will see a lesser penalty for their unrevealed expenses.

The cut off date for individuals to release information about such gains from property sales still stands as being August 9th 2013, with a further 4 weeks then being offered to such persons to actually pay back the benefits they had originally 'reaped'.

It is thought that as HMRC propose to carry out such through checks, uncovering records from many years previous, that this in turn may begin to reveal many normal individuals who are honestly oblivious to the situation now presented to them.

There are fears that there may be people out there, targeted for tax repayments, who are genuinely unaware of the consequences awaiting them due to selling their second home.
Stephen Barratt, private client tax director at James Cowper has suggested that all individuals alike, whether they are aware or not aware of the consequences they face must: "seek professional advice because it is important that those preparing the calculations fully understand the complex rules and so ensure that the tax, and therefore any penalty and interest, are kept to a minimum".