HMRC Investigates Sales of Second Homes
The Sunday Times has reported that HM Revenue & Customs are set to investigate individuals who they believe may have sold a second home and/or rental property but did not report any capital gains tax (“CGT”) on their tax returns.
Letters will be sent to 1,500 individuals that HMRC has identified as having sold property during the 2015/16 without declaring a CGT liability.
The letters will invite taxpayers to explain why they haven’t paid the CGT that HMRC’s computer models suggest they may owe. Failure to reply could result in a formal investigation and increased penalties.
If you have any doubts about your tax affairs, then you should speak to a tax professional to ensure you are complying with the law.
If you have undisclosed tax liabilities, then making an unprompted disclosure will normally result in lower penalties than if you only disclose after HMRC has contacted you. Therefore, it’s better to report undisclosed liabilities sooner rather than later.
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