HMRC targets second home sales 12 March 2013
People that haven’t paid tax on profits from the sale of second homes face fines and prison as part of the latest campaign against tax evasion by HMRC.
The property sales campaign is aimed at those selling homes in the UK or abroad, where CGT should be paid on any profits made, including properties people have sold that were given to them, and the sale of holiday homes.
People will have until 9 August to tell HMRC about any unpaid tax on property sales, and until 6 September to pay the tax owed.
After 6 September, HMRC will take a closer look at the tax affairs of those who have sold properties other than their main home, but who appear to have paid no CGT.
Those who come forward voluntarily will pay a lower penalty than if HMRC approaches them first.
Marian Wilson, head of HMRC campaigns, said: “Some people will not understand that selling a second home, a holiday home or a property disposed of as a gift could attract CGT. They need to look at our website or contact us. Telling HMRC about your tax liabilities is simple and straightforward, and help, advice and support are available.”
Gary Ashford, a spokesman from the CIOT, warned that the September deadline may not give people enough time to calculated tax owed from property sales.
“While September seems like a long way away, it can take a while to pull together relevant documentation to establish the extent of any omission.
“Rather than launching different targeted campaigns in rapid succession, HMRC should focus their efforts on a big national campaign open to all taxpayers whose tax affairs are not up to date. A one-off ‘general disclosure facility’ that lasts sufficiently long and is sufficiently attractive to get people to come forward to clean the slate would make sense.”
A spokesman for HMRC said it did not have a target for the amount of tax it wanted to raise from its property campaign. Data from the 2011 census indicates that 1.57 million people living in England and Wales have a second address in the UK, whilst a further 820,000 indicated that they have a second address outside of the UK, he said.
HMRC has recently interrogated data on over 10m property transactions to identify which ones may not have been accurately returned by customers, he said.
HMRC said that its campaigns against tax evasion in different parts of the economy have raised £547 million from voluntary disclosures, and nearly £140m from follow-up activity, including 20,000 completed investigations.
Campaigns have targeted offshore investments, medical professionals, plumbers, VAT defaulters, coaches and tutors, electricians, online traders and higher rate taxpayers with outstanding tax returns. There are 13 criminal investigations underway, with five convictions already secured, according to HMRC.
