HMRC And Undeclared Gains On Sale Of Second Properties
Have you made a profit and not told them?
POSTED BY HELEN BEAUMONT ON 03/08/2018 @ 8:00AM
HMRC has identified 1,500 people who they're going to write to about why they haven't paid the Capital Gains Tax on the sale of second homes or buy-to-let properties ...
If you've made a profit on the sale of a second property then you may owe Capital Gains Tax!
photo by 'eduard militaru' on unsplash
If you sold a property in the 2015-16 tax year then you could be on the list if you didn't declare a profit on which Capital Gains Tax would be due. The final wording is still being finalised, but this group can expect a strongly worded letter asking why they didn't pay.
"Failure to respond or offer a suitable explanation will kick off a formal investigation!"
The sale of a second home or a buy-to-let property falls into the realms of Capital Gains Tax. Even if any profit you made is covered by your tax-free allowance, HMRC still has to know about it, even if no tax is due.
Capital gains tax is due if you make a profit when you sell:
Personal possessions worth over £6,000, apart from a car
Property that’s not your main home
Your main home if you’ve let it out, used it for business or it’s very large
Shares that are not in an ISA or PEP
HMRC, although a more professional and understanding organisation these days, are using various new data sources to flag up people who haven't paid Capital Gains Tax on the sale of assets.
Not only can they demand any unpaid tax you owe, they can demand what they think you owe them and can impose fines of up to 100% of that amount. It's best to be upfront and open with them.
"Would you like to know more?"
If you're worried that you fall into this group and may owe HMRC some Capital Gains Tax, do give me a call on 01908 774323 or click here to ping me an email and let's see how I can help you.
Until next time ...
If you're looking to work with an expert tax advisor with a wide range of tax experience, do visit www.essendontax.co.uk to find out more about me and discover how I can help!
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen’s specialist knowledge in tax planning and experience ensures every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.