The Standard reports that landlords who have sold a rental property but failed to declare the profit to HMRC are being targeted in a new crackdown on tax evasion. Using Land Registry records, HMRC’s “property sales” campaign aims to recover millions of pounds of unpaid CGT from landlords and others who have sold second or holiday homes.
Source: Evening Standard
We say: If this is you, come and talk to us about making a disclosure to HMRC before the manila envelope drops through your door: unprompted disclosure saves penalties. Better still, if you have a second or holiday home which you are thinking of selling, please come and talk to us before you sell it.
There are often fairly simple non-aggressive strategies which can be put into place to reduce or even extinguish the tax liability which might otherwise arise on sale. Also, remember that CGT doesn’t only apply to UK properties: if you have a second home overseas CGT may need to be taken into account.
In that case further factors may need to be taken into account: are you domiciled in the UK? How has the local currency moved over your period of ownership (you may have a local currency gain but a CGT loss or vice versa – check our Briefing)? Are you sitting on a loss (perhaps on Spanish property?) which you can realise and offset against other gains? If in doubt, talk to us.
All views expressed in the BKL Blog are those of individual contributors and may not reflect those of Berg Kaprow Lewis LLP
