Holiday home owners who fail to reveal how much profit they make when selling their property have been offered an amnesty by the tax man – but only for a short time.
HM Revenue and Customs has urged people to come forward before it begins a targeted campaign to track down anyone who has broken the rules.
Martyn Bramwell, Small Business and Tax Manager at Dyke Yaxley, Chartered Accountants in Shrewsbury, said the amnesty was an opportunity for holiday home owners to bring their tax up-to-date.
“The scheme applies to anyone who has sold a residential property that’s not their main home, whether it’s in the UK or abroad.
“If the property owner made a profit, but did not tell HMRC, they may not have paid the right amount of tax.
“So this amnesty gives them the chance to voluntarily disclose their income or any capital gains, and pay what they owe before HMRC begins its own investigations.
“To take advantage of the best possible terms though, tax payers must take action and pay anything that’s outstanding by 6 September, so it’s vital to come forward as soon as possible.”
As well as holiday homes, the scheme also applies to the sale of any property that the owner had previously rented out.
“And even if you didn’t originally purchase the property yourself, but inherited it or received it as a gift, you may still be liable to pay tax on the gain. To find out whether the amnesty applies to your individual circumstances, the best way forward is to seek expert advice as the sooner you act the better.”
Martyn said the campaign did not apply to the sale of an owner’s main home which would qualify for private residence relief (as long as it had been their only home or main residence, and as long as it was used purely for residential purposes).
“It does not apply to anyone who buys and sells property as a business either, or anyone who needs to disclose a gain made by a trust, company or partnership. It’s purely for people who have sold or disposed of a holiday home, or additional residential properties they owned alongside their main dwelling.”
Dyke Yaxley’s Small Business and Tax Manager, Martyn Bramwell