Posted on 2 August 2013
Have you disposed of properties which did not qualify as your main residence? If so, have you adequately declared the disposal to HMRC?
As part of HMRC's continuing attempt to eradicate tax avoidance, they are currently running a campaign to encourage taxpayers to make a full disclosure where they have sold a property which should have attracted capital gains tax and where the taxpayer has neglected to inform HMRC of the transaction.
Tax payers who have sold properties which are not their main residence (including second homes, buy to let properties and holiday homes) and have not informed the tax authorities about their profit have until 9 August 2013 to disclose details of the disposals to HMRC. Following this, taxpayers have until 6 September 2013 to pay any tax which they owe on such sales.
HMRC holds a database for all property disposals attracting Stamp Duty Land Tax. Once the above deadlines have passed, HMRC will compare the data held on the database with taxpayers tax records to establish whether full details have been declared to HMRC in respect of such disposals.
If taxpayers chose not to respond to this campaign, to the extent that tax is subsequently found not have been disclosed, HMRC may apply heavy penalties and / or criminal proceedings.
If you have sold such a property which has not been declared to HMRC we recommend that a disclosure is made as soon as possible. Please call you usual Smith Cooper contact or one of our tax experts if you would like to discuss or need further advice.