Barely a month goes by these days without HMRC announcing they are setting up a new task force aimed at a particular business sector. The latest announced this week is aimed at people selling second homes – property sales campaign. According to HMRC they will be looking at over 10 million property transactions to determine if they have been reported correctly, that should keep them busy for a while !
HMRC clearly believe that there is a lot of people out there who are not declaring the sale of rental or holiday properties either in the UK or abroad. Gains made on properties that are an individual’s main residence may be subject to capital gains tax at either 18% or 28% depending on total income for the tax year, so properties that have been owned for a significant period and have therefore increased in value significantly could trigger a large tax bill on sale. Individuals have until the 9th August to notify HMRC of any unpaid tax and avoid higher penalties if HMRC discover omissions at a later date.
Property tax is a complex area and there are a number of important reliefs that may be relevant so if you have any concerns in this area do get in touch.