HMRC are writing to taxpayers about undeclared property income, so if you receive a letter, it is time to act.
Who is HMRC contacting about undeclared property income?
HMRC are writing to taxpayers who they think may own or have sold a second property, without detailing rental income or capital gains on their tax return.
Why is HMRC contacting me about undeclared property income?
HMRC can pick up property ownership details from the Land Registry and they also have other sources of information.
What should I do if I receive a letter about undeclared property income?
There are two things you should do if you receive one of these letters:
- Don’t panic
- Don’t ignore it.
The information that they have used may be incorrect. So, if there is no rent or capital gain to report, HMRC must be advised.
If the information is correct, contact your tax advisor who can guide you on what you should do next.
Some important points to consider
There are two main points to be aware of:
- If a property is owned jointly by two people who are married (or in a civil partnership), the rental income will be taxed on both of you unless various conditions are met.
- If you make a gain on the sale of a residential property, it must be reported to HMRC and tax must be paid within 60 days of the disposal, unless you have sold a house that has always been your main residence.
As always tax rules can be complex, if in doubt contact your tax advisor or talk to Walker & Sutcliffe this way: Click Here