Over the past 2 years, HMRC have clawed back an extra 23% in capital gains tax by focusing on information from the Land Registry to discover residential property sales by buy-to-let properties. Landlords with rental properties are urged to make sure they add rental income to their tax returns and to also include any profits from property sales.
However, although some landlords may have purposefully hidden profits from a sale from HMRC, it may be that problems have occurred when offsetting expenses on their tax returns.
Buy-to-let investors can offset the following:-
HMRC have specially created a new team to solely deal with capital gains tax enquiries. This, in itself, gives a massive indication that capital gains tax evasion is something they are focussing heavily on. An increase in capital gains tax could mean that avoidance and evasion will increase as people try to avoid paying more tax.
The official line from HMRC was:-
“Our enquiries are risk-based, enabling us to concentrate our resources on the non-compliant, reducing the burden on honest taxpayers.
We risk assess returns using a variety of methods, as well as cross-matching database information, both our own and external. Enquiries into the disposal of second homes is just one area we look at.”
Anyone who is the subject of an enquiry by HMRC, whether into capital gains tax or any other area, should always have a specialist in dealing with tax investigations by their side.
To speak to an adviser today call us now on 0800 471 4546.