Latest News

Hospital Must Detain Suicidal Patient Hospital Must Detain Suicidal Patient
Court Agrees 'Too Much, Too Soon' Plea Court Agrees 'Too Much, Too Soon' Plea
Obligation on Seller Sets Boundary Obligation on Seller Sets Boundary
Holiday Letting Property a Business, Not an Investment Holiday Letting Property a Business, Not an Investment
Benefit to Parents Not Sufficient Benefit to Their Son Benefit to Parents Not Sufficient Benefit to Their Son
Assisted Signature Case Decided by Court of Appeal Assisted Signature Case Decided by Court of Appeal
Package Tour or Travel Booking? Package Tour or Travel Booking?
Argument Over Strip of Land Settled by Court of Appeal Argument Over Strip of Land Settled by Court of Appeal
Shared Parental Responsibility and Divorce Shared Parental Responsibility and Divorce
Scots Change Intestacy Law Scots Change Intestacy Law

HMRC Tighten Property Ownership Disclosure

HM Revenue and Customs (HMRC) have had difficulties in the past in checking on property sales to ensure that the ‘principal private residence’ exemption for Capital Gains Tax (CGT) is being used correctly. Notwithstanding the complexity of the legislation, HMRC have had no effective means of ascertaining whether the person selling a property also owns other properties.

There have been numerous cases in which HMRC have discovered that owners of a number of properties have made capital profits that should have been subject to CGT, but have failed to declare them. HMRC believe that this is a significant problem.

For this reason, new reporting procedures have now been introduced. Since 4 July 2011, when a property is purchased, it is necessary to submit a new-style form for Stamp Duty Land Tax purposes which shows the National Insurance number of an individual purchaser or the Unique Taxpayer Reference or VAT registration number of a company or partnership.

These references are the means by which HMRC maintain their records. Accordingly, a future sale will, in all likelihood, be cross-referenced to the relevant tax record. Similarly, purchases of a number of properties without any associated income being disclosed may well raise questions from HMRC.

Click here for guidance on CGT for owners of two homes.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.