Time running out to catch up with second property tax

People who have sold properties which are not their main homes, and have not told HM Revenue and Customs (HMRC) about any profit, have one month left to make use of the disclosure opportunity.

HMRC’s Property Sales Campaign is aimed at those selling second homes in the UK or abroad where Capital Gains Tax (CGT) should be paid. It includes properties that were rented out and holiday homes.

Taxpayers have until 9 August to tell HMRC about any unpaid tax on such property sales, and until 6 September to pay the tax that they owe. By using the campaign to come forward voluntarily, people will receive the best possible terms, and any penalty will be lower than if HMRC approaches them first.

Marian Wilson, Head of HMRC Campaigns, said:

“Over the last few months we have published articles and written to a lot of people to make them aware of the campaign. As a result, hundreds of people have now come forward. It is not too late for people to contact us.

“If you have sold a second home you might not know it could attract Capital Gains Tax. If anyone has done this in the past and is unsure, they should look at HMRC’s website and use our simple decision tree to find out if they might owe CGT. Telling HMRC about your tax liabilities is straightforward, and help, advice and support are available.”

After 6 September, HMRC will take a much closer look at the tax affairs of people who have sold properties other than their main home, but who appear to have paid no CGT. We will use information that we hold about property sales in the UK – and abroad – to identify people who have not paid what they owe. Penalties – or even criminal prosecution – could follow.

People can take advantage of the campaign by:

·  telling HMRC about unpaid tax by 9 August

·  disclosing the details of what they owe

·  paying the tax owed by 6 September.

For more details on the campaign, taxpayers can visit HMRC’s website. Help is also available from HMRC by calling 0845 601 8819.

Notes for editors

1. Campaigns have so far raised £547 million from voluntary disclosures, and nearly £140 million from follow-up activity, including 20,000 completed investigations. HMRC campaigns have targeted offshore investments, medical professionals, plumbers, VAT defaulters, coaches and tutors, electricians, online traders and higher rate taxpayers with outstanding tax returns. Seven people have been convicted, with custodial sentences handed out of up to two years. They have between them had to pay over £550,000.
2. People do not have to be concerned about the sale of their main home (or private residence) as this is usually exempt from capital gains tax. This exemption may not apply, however, when it has not been their only home or main residence for some time, or they have used it for business, including letting the property, or they have sold part of the garden.
3. HMRC holds the database for all property disposals attracting Stamp Duty Land Tax. Once the campaign disclosure period closes, HMRC will compare this data with people’s tax records to establish whether they have told HMRC about the sale or disposal of second and holiday homes.
4. Further information on HMRC campaigns: www.hmrc.gov.uk/campaigns/news.htm
5. Follow HMRC on Twitter @HMRCgovuk
6. HMRC's flickr channel www.flickr.com/hmrcgovuk