Today is the final opportunity for taxpayers to tell HMRC about any unpaid tax due on the sale of second homes which are not their main residence, or risk a penalty or possible prosecution.
In March this year HMRC launched its Property Sales Campaign aimed at those selling second homes in the UK or abroad where Capital Gains Tax (CGT) should be paid, including properties that were rented out and holiday homes.
The campaign gave taxpayers until 9 August to tell HMRC about any unpaid tax due on such sales, with a deadline of 6 September for payment of any outstanding amounts. HMRC said that by using the campaign to come forward voluntarily, people would receive the best possible terms, with any penalty lower than if HMRC approached them first.
Home owners who have not paid CGT on a sale could face a penalty of 30% to 100% of overdue tax, while those who make a declaration under the HMRC's campaign are likely to be charged a penalty of 10% to 20% of overdue tax.
Once the disclosure period closes, at the end of today, HMRC will be using information it holds about property sales in the UK and abroad to identify people who have failed to pay CGT on second homes, by comparing details on the HMRC database for all property disposals attracting Stamp Duty Land Tax with individual's tax records. Those who are identified as having failed to tell HMRC about the sale or disposal of second or holiday homes will face penalties and even the possibility of criminal prosecution.
Last month, HMRC sent letters to 35,000 taxpayers who had not yet registered to pay CGT from the sale of a second home, holiday home or buy-to-let property, and says its investigations will go back 20 years. According to the 2011 census, almost 1.6m people have a second home in England and Wales, with 820,000 owning a second property abroad.
Marian Wilson, head of HMRC Campaigns, said that over the last few months, hundreds of individuals have come forward with details of their second property sales.
'If you have sold a second home you might not know it could attract CGT. If anyone has done this in the past and is unsure, they should look at HMRC's website and use our simple decision tree to find out if they might owe CGT. Telling HMRC about your tax liabilities is straightforward, and help, advice and support are available,' said Wilson.
People do not have to be concerned about the sale of their main home (or private residence) as this is usually exempt from CGT. This exemption may not apply, however, when it has not been their only home or main residence for some time, or they have used it for business, including letting the property, or they have sold part of the garden.
