The HMRC have given a deadline to all property owners who received a rental income either here in the UK or abroad. This applies to any property that is not a main residence, including holiday homes. They have pledged to crack down on any buy-to-let property owners who are trying to get away with capital gains tax avoidance.
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”.
HMRC can find out about sales of property from land registry records, advertising, changes in reporting of rental income, stamp duty land tax (SDLT) returns, capital gains tax (CGT) returns, bank transfers and other ways.
People have until August 9 to tell HMRC about any unpaid capital gains tax on property sales and must pay any tax owed by September 6. Until this date, fines will be smaller for those who haven’t paid their tax. It is hoped this will encourage more landlords to come clean.
Marian Wilson advises: “It is better to come to us before we come to you. After the opportunity closes on 6 September, 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 don’t need to be concerned about the sale of their main home, which is usually exempt from CGT.