THE PROPERTY Sales campaign is an opportunity for you to bring your tax up to date if you have sold a residential property, in the UK or abroad, that’s not your main home.
If you made a profit but have not told HM Revenue & Customs (HMRC), you might not have paid the right amount of tax. To take advantage of the best possible terms you must voluntarily disclose your income or gains and pay what you owe by 6 September 2013.
After 6 September, HMRC will use the information it holds to target those who should have made a disclosure under this campaign and failed to do so.
Who can use this campaign?
This campaign is for you if you’ve sold, or disposed of, second or additional residential properties either in the UK or abroad. These could include a holiday home or a property that you rented out. You may also be able to use this campaign where you have sold your main home. This would normally qualify for Private Residence Relief but in some circumstances the relief is restricted. Where the entitlement to this relief is restricted Capital Gains Tax may be due if you are liable to UK taxes.
If your circumstances meant that Capital Gains Tax was due on the sale of your main home you may be able to use this campaign.
Even if you didn’t originally purchase the property you may still be liable to pay tax on the gain if you acquired the property another way. For example you may have inherited it or it may have been a gift.
Only certain people can use this campaign. It is not for you if you:
- Buy and sell property as a business. These sales are subject to Income Tax rather than Capital Gains Tax.
- Need to disclose a gain made by a trust, company or partnership.
If you take part in this campaign and tell HMRC about any gain that you haven’t previously disclosed:
- you can assess the correct level of penalty to reflect why you have not paid the right amount of tax in the past
- if your circumstances warrant it you may be able to pay what you owe by instalments
If you are eligible to take part in the campaign you must also tell HMRC about any other income or gains that you haven’t previously disclosed. This could include:
- income from property or land rental (less the expenses relating to that income)
- earned income not taxed before you receive it, for example, profits from another business
- investment income not taxed before you receive it, for example, interest
- taxed income where additional tax is payable
- capital gains on the sale of other assets or properties
This is a chance to get things right now and know exactly how much it will cost to sort out your tax for earlier years.
Further information at Property Sales campaign
Basura says:
March 9, 2013 at 8:04 am
Fine!, I wonder if the UK Tax Department will hand out refunds if as is likely we have sold our house at a loss due to the European Recession and in particular the Cypriot Property Spivs who have ripped off so many expats?
Steve says:
March 9, 2013 at 11:49 am
Can you be liable for capital gains on the disposal of an asset you never actually owned?
I have been advised that it is not necessary to notify HMRC of the disposal of an asset that I don’t own because I don’t have title deeds. The position with regards to letting may also not be clear cut. I think it may be regarded as sub-letting if no title deeds have been forthcoming.
Thought there would be loads of comments, thoughts etc;
Taking the 2 above in order. Basura
Of course you will get a tax refund, not in money though. Any capital loss is carried forward indefinitely until you make a gain, that future gain is reduced by the loss, so less tax is paid.
Steve,
Love the logic?
Did you not hand over cash and in exchange get a property to use as stated in the contract and a sub clause is that you fully own it when the title deeds are issued.
If no title deeds are issue but you don’t want the property do you walk away losing all that cash or do try and sell. (you can sell you know) You know the drill, for the cancellation of the contract you get cash. If its more than what you paid for it then you have made a capital gain on your cash. How would you want it taxed as interest all taxable or as a capital gain after annual exemptions.
As for rentals, you have made money hopefully?
Increase in wealth Taxable. UK Resident then you are taxed on your worldwide income with local taxes off set.
Can you be liable for capital gains on the disposal of an asset you never actually owned?
I have been advised that it is not necessary to notify HMRC of the disposal of an asset that I don’t own because I don’t have title deeds. The position with regards to letting may also not be clear cut. I think it may be regarded as sub-letting if no title deeds have been forthcoming.
I thought of that Basura, but this is Cyprus you should know by now you do not get a refund on anything, that is why HM call the staff tax collectors.
Fine!, I wonder if the UK Tax Department will hand out refunds if as is likely we have sold our house at a loss due to the European Recession and in particular the Cypriot Property Spivs who have ripped off so many expats?