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Jones purchase
Posted: 24 September 2021 09:48:47(UTC)
#13

Joined: 25/03/2019(UTC)
Posts: 117
Come clean, disclose and accept the bill.

There are a number of places that can be audited including the solicitors involved and agents and if you try to avoid the CBT by non disclosure you will spend the next few years 'looking over your shoulder'.

Try and look on the bright side - I expect that you have made a handsome profit from both the rental stream and growth, so you will still be quids in.
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D Bergman
Posted: 24 September 2021 13:13:45(UTC)
#4

Joined: 22/03/2018(UTC)
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P L;29792 wrote:
Assuming the property in question isn't your only property then by selling you will incur Capital Gains Tax on the profit.



This is wrong - any property (whether your only property or not) will incur CGT unless it is your primary residence.
So (for example) if you own a property that is let out, and you yourself live in a different rented house or your partner's flat or with your parents, you will still have to pay CGT on the profit made upon selling the property.
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2 users thanked D Bergman for this post.
Tim D on 24/09/2021(UTC), Ad B on 24/09/2021(UTC)
Ad B
Posted: 24 September 2021 21:08:15(UTC)
#14

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Ok, as an accountant who works in tax.

V briefly, go see an accountant who has experience in dealing with HMRC investigations. The advice in 'coming clean' is correct, but there is a wrong way to do it and a right way. The right way will cost you a heck of a lot less.
The accountant will make sure you do it the right way.
HMRC, if they get a sniff that you're not aware of you're fundamental rights, will, I'm afraid, abuse the process.
In the meantime,get all the info together to give to the accountant. He will then be able to calculate the position as a while, and know what the position is to defend. He'll also need to know your other income in each of the last 15 years.
All the best.
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4 users thanked Ad B for this post.
Tim D on 24/09/2021(UTC), SimonHughes on 25/09/2021(UTC), Julianw on 25/09/2021(UTC), Guest on 27/09/2021(UTC)
MBA MBA
Posted: 25 September 2021 05:41:42(UTC)
#15

Joined: 16/12/2012(UTC)
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Given the enormous popularity of BTL combined with low financial literacy i suspect there will be lots of people who have inadvertently undertaken tax avoidance

I know people with BTL flats who’ve never heard of CGT or that they need to do a self assessment every year
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Guest on 27/09/2021(UTC)
ANDREW FOSTER
Posted: 25 September 2021 07:22:36(UTC)
#16

Joined: 23/07/2019(UTC)
Posts: 8,124

Go and live in it for 6 months, or at least change all your adresses to it. It then becomes your main residence. IIRC. Then just sell it.

I know someone who did this through a portfolio of 8 properties and never paid a penny CGT.

Some risk of course...
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mark spurrier
Posted: 25 September 2021 09:07:51(UTC)
#17

Joined: 17/01/2018(UTC)
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Two things

I think it needs to be your home for a year

Second, I paid £51,748 tax last year. Why should you be different?
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7 users thanked mark spurrier for this post.
D Bergman on 25/09/2021(UTC), Sheerman on 25/09/2021(UTC), Julianw on 25/09/2021(UTC), countrymum on 25/09/2021(UTC), Newbie on 25/09/2021(UTC), Jones purchase on 25/09/2021(UTC), RSK on 29/09/2021(UTC)
D Bergman
Posted: 25 September 2021 09:18:41(UTC)
#19

Joined: 22/03/2018(UTC)
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mark spurrier;187530 wrote:
Two things

I think it needs to be your home for a year

Second, I paid £51,748 tax last year. Why should you be different?


Thank you Mark - you got this in just as I was wondering if to wade in & comment along the same lines.

Some posters seem to be assuming it's sort of OK if you can get away with it - I doubt AF would have casually said (with no disapproval) that he knew someone who was a thief.

As for the statement that people with BTL properties don't know about CGT or self assessment - I knew people who said that, ignoring the fact that they had been told several times about their tax liabilities. They just used their so-called ignorance to protest their innocence.

And none of this is tax avoidance, it is evasion and is actually theft.
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Julianw on 25/09/2021(UTC), countrymum on 25/09/2021(UTC), Newbie on 25/09/2021(UTC), Tim D on 25/09/2021(UTC)
mark spurrier
Posted: 25 September 2021 10:38:41(UTC)
#22

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D Bergman;187532 wrote:
mark spurrier;187530 wrote:
Two things

I think it needs to be your home for a year

Second, I paid £51,748 tax last year. Why should you be different?


Thank you Mark - you got this in just as I was wondering if to wade in & comment along the same lines.

Some posters seem to be assuming it's sort of OK if you can get away with it - I doubt AF would have casually said (with no disapproval) that he knew someone who was a thief.

As for the statement that people with BTL properties don't know about CGT or self assessment - I knew people who said that, ignoring the fact that they had been told several times about their tax liabilities. They just used their so-called ignorance to protest their innocence.

And none of this is tax avoidance, it is evasion and is actually theft.


My experience with HMRC has been that ignorance usually leads to paying too much tax and, they won't do anything to make sure you pay the right amount e.g. they won't mention offsetting allowances.

Self assessment was introduced in the 1996/7 tax year. You might as well claim you didn't know that Income Tax had to be paid.

If you have held a property for a number of years, surely there must be enough equity in it to pay the tax bill?

Sorry to seem unsympathetic but I really struggle with anyone not knowing about SA (which has direct questions on BTL) after it has only been around for 25 years.

This sits with close friends of mine who I worked with as an IT contractor who paid virtually no tax for 20 years and now being asked by HMRC to pay up. I think HMRC are wrong in what they are doing - retrospective rule changes etc but we all knew that funneling $$ via a Cayman Islands Trust, taking a loan from that Trust and then defaulting on the repayments was pretty obviously "income" and, the transactions were engaged in purely for tax purposes. At least my friend isn't claiming ignorance. :)
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Ad B
Posted: 25 September 2021 10:57:55(UTC)
#18

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mark spurrier;187530 wrote:
Two things

I think it needs to be your home for a year



The occupancy test is qualitative, not based on time. Though, like many tax issues, the test is unfortunately not legislated, but rather based on case law.
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mark spurrier on 25/09/2021(UTC)
ANDREW FOSTER
Posted: 25 September 2021 12:21:38(UTC)
#20

Joined: 23/07/2019(UTC)
Posts: 8,124
D Bergman;187532 wrote:


Some posters seem to be assuming it's sort of OK if you can get away with it - I doubt AF would have casually said (with no disapproval) that he knew someone who was a thief.



I described a CGT avoidance method, it's not evasion AFAIK.

Actually moving in means it IS your home. Redirecting mail to pretend you were there would be evasion. Living there means it's your home.
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