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Second homeowners warned on August tax deadline

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  • 15/03/2013
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Second homeowners warned on August tax deadline
HMRC's crackdown on second homeowners who sell up without paying Capital Gains tax on profits will catch out tax avoiders unless they declare before the summer, warned an accountant.

HMRC launched its Property Sales Campaign on 5 March targeting people who sold second homes without declaring any profits made to the taxman. Transgressors will receive penalty letters if they are found out.

This applies to any property that is not a main residence, including holiday homes and is expected to be retrospective.

Stephen Barratt, private client tax director at accountants and business advisers James Cowper said: “CGT is applicable when a property, which is not a main home, is sold at a profit that tops the annual CGT allowance, which is currently £10,600.”

Owners have until 9 August to tell HMRC about any unpaid tax on property sales, and a further four weeks until 6 September to pay the tax owed. Those who disclose voluntarily will pay lower penalties.

Barratt said owners could lower tax bills if the property was hired out as a holiday let.

“Early planning can often help minimise future tax bills,” he added.

 

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