HMRC suspect that many sales of second homes are not being reported for tax purposes. They have used their extensive powers to obtain details of property sales both in the UK and abroad and are now inviting people to come forward to voluntarily disclose previously undeclared sales.
Most people are aware that they don’t have to pay any capital gains tax when they sell their home, but this is only due to a specific capital gains tax exemption for the main residence. If you sell a property which is not your main residence then tax will be payable on any increase in value over its original purchase cost.
The “Property Sales Campaign” is an opportunity to tell HMRC about previously undisclosed sales and to pay a lower rate of penalty than would otherwise apply if HMRC were to discover the undeclared amount themselves.
To take advantage of the campaign it is necessary to make a notification to HMRC by 8 August 2013 and then to submit a completed disclosure form along with the tax, interest and penalties due by 9 September.
If you think this may affect you and you would like further information or assistance in making a disclosure then please contact me.
The information in this article was correct at the date it was first published.
However it is of a generic nature and cannot constitute advice. Specific advice should be sought before any action taken.
If you would like to discuss how this applies to you, we would be delighted to talk to you. Please make contact with the author on the details shown below.
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