HMRC to target property sales
From September 2013, HM Revenue and Customs (HMRC) will begin a tax review into residential property sales.
The new Property Sales Campaign (PRC) will see HMRC reviewing the tax records of those who have sold residential properties but not reported them, to collect tax on undeclared gains.
People who come forward by 9 August and calculate and pay the tax due by 6 September may receive preferential treatment – for example they may be able to agree lower penalties than might otherwise apply.
The campaign is likely to focus on second homes, and according to HMRC, PRC will not apply to anyone who sells property as part of their business, through their company, partnership or as a trustee.
Those who sold property on or after 6 April 2012 should also not face scrutiny, as they have until 31 January 2014 to declare any taxable gains.
From September HMRC will be reviewing tax records of anyone who has sold a property and has not declared any taxable gains, since at least April 2007.
It is understood that the tax authority will utilise National Insurance numbers on Stamp Duty Land Tax (SDLT) forms to tie these in with income tax records of individuals.
While the campaign is primarily focusing on second homes, HMRC also plans to investigate sales of properties which could have been used for reasons other than residential accommodation, for example where a claim has been made for a tax deduction for home running costs.
For further information, please contact Stuart Hinnigan at the office.
Author: Stuart Hinnigan FCA CTA
Stuart’s career in accountancy began when he joined Preston based Moore and Smalley in 1994 following his graduation from Lancaster University. He qualified as a Chartered Accountant in 1997 and then chose to specialise in...
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