HMRC has announced a new campaign for individuals who have previously sold a residential property either in the UK or abroad which is not their main home and they have not informed HMRC of the sale.
Obviously the angle HMRC is looking at here is when a second property is sold which is not the main residence, the disposal of the asset is subject to capital gains tax. However due to the housing market, any sales of second homes in recent years may result in a loss as opposed to a gain. Irrespective of the position, individuals should take this opportunity to put their tax affairs in order. It should also be borne in mind that where losses have been incurred these can be set against future gains, but individuals should be aware of the time limits (4 years from the end of the tax year you make a loss) which apply when claiming losses; so don’t miss the boat.
The campaign commenced on 5 March 2013 and individuals have until 9 August 2013 to notify their intention to make a disclosure. All disclosures must be submitted to HMRC by 6 September 2013. The campaign does not offer any enhanced penalty terms, other than making a voluntary disclosure. Additionally, there is no guarantee of immunity from prosecution for the tax offence. Consequently, individuals may wish to consider making a disclosure to HMRC under the terms of the Liechtenstein Disclosure Facility where reduced penalties may be able to be obtained and an immunity from prosecution secured.
HMRC have a number of ways to obtain information regarding property transactions, including Stamp Duty Land Tax forms, Land Registry, third party notices to estate agents and conveyencing solicitors, third party notices to banks, information obtained as part of overseas bank initiatives, property websites etc. it would appear that there is little place to hide if you have not previously disclosed a sale of a second property and do not take advantage of the campaign.
If you are still of the mind-set that HMRC won’t find you, you may be interested to read the updated Campaigns page. Click here to find out the results from HMRC’s previous campaigns.
So don’t leave it to chance like the four plumbers did, who each received a criminal conviction, contact us for a confidential discussion on the matter and advice on how to bring your tax affairs up to date.