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Julianw
Posted: 25 September 2021 12:33:47(UTC)
#23

Joined: 28/07/2016(UTC)
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This article adresses some of the issues raised:

https://www.theguardian....ey/2008/feb/13/property1
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Tim D
Posted: 25 September 2021 13:07:33(UTC)
#21

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ANDREW FOSTER;187575 wrote:
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.


Sorry, but it just ain't so. Seems to be a common misconception though.

To be clear: if you move out of your home (or buy a property) and let it out for many years and then move back in and - a while later - sell it, then you do not get the period you weren't there CGT-free as if it had been your primary residence for the whole period. Some of the gain - pro-rata - will be taxable. You do get to nibble away at it a bit, but only 9 months currently (used to be 36 months, years ago - which is why Julianw's old 2008 article linked above mentions 3 years - but reductions have been an easy "war on landlords" score for the chancellor).

See the worked examples at https://www.property118....-minimise-cgt-liabilty/ and https://www.property118....erty-you-have-lived-in/ (those were written when the PPR period was still 18 months).

And here's HMRC's info on how to report tax evasion/fraud: https://www.gov.uk/gover...ct/report-fraud-to-hmrc . Please shop this "someone who did this through a portfolio of 8 properties and never paid a penny CGT" scumbag.
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4 users thanked Tim D for this post.
D Bergman on 25/09/2021(UTC), Julianw on 25/09/2021(UTC), Ad B on 25/09/2021(UTC), ANDREW FOSTER on 26/09/2021(UTC)
Ad B
Posted: 25 September 2021 20:17:49(UTC)
#24

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Julianw;187578 wrote:
This article adresses some of the issues raised:

https://www.theguardian....ey/2008/feb/13/property1


Not having a particular go here, but in tax it's dangerous to quote articles that are based on what was current legislation at the time
If you followed that article now, you'd find yourself with some serious tax issues.
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2 users thanked Ad B for this post.
Tim D on 25/09/2021(UTC), Mostly Retired on 25/09/2021(UTC)
Ad B
Posted: 25 September 2021 20:23:57(UTC)
#25

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One of the biggest misconceptions people have had regarding buy to let income is the confusion between the interest element of the repayment being an allowable deduction, and the capital element not being so.
Sounds basic (and it is!)
But so many think it's just the whole repayment amount that can be set against the rental income. Therefore, in cases where the income just about covers the total mortgage repayment, it's not entirely a surprise that folk end up thinking they owe no tax on any profit, because in their minds they haven't made one.
And that was before the extra complications arising from the restriction for interest deductibility introduced in 17/18.
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2 users thanked Ad B for this post.
kim shillinglaw on 25/09/2021(UTC), Tim D on 26/09/2021(UTC)
Dentmaster
Posted: 26 September 2021 20:01:41(UTC)
#26

Joined: 23/01/2021(UTC)
Posts: 440
2 options the way i see it. Unless your going to cash in ,leave the country then sell go and pay no tax.However if you plan on living here i would defo go with the consensus of the forum.We all have to pay tax.You haven't ,its so easy to get into the mindset i will sort that tomorrow.I am sure most of us are like that.But fxxck me thats a long time NOT to get your act together. You are obviously aware of this forum ,so to me that would suggest your certainly aware of your problems/responsibilities now and have been for the last 15 years. If you sell the house nothing will trigger that to HMRC. However when you do your next tax return you will basically have to lie.Now the problem will be not just the loss of tax on the rent but obviosuly the CGT tax thats due. Own up pay up.Take the hit.
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Tim D
Posted: 26 September 2021 23:29:00(UTC)
#29

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Dentmaster;187774 wrote:
...If you sell the house nothing will trigger that to HMRC. However when you do your next tax return you will basically have to lie...

Just to be pedantic, since last year...
Quote:
For UK property disposals made from 6 April 2020, you have 30 days after the property’s completion date to report and pay any Capital Gains Tax due on your UK property disposals.

(with interest/penalties added if you don't meet that deadline). See https://www.gov.uk/tax-sell-property

So technically the "lie" (I prefer "fraud") would have commenced when someone who actually owed CGT failed to meet that deadline. Subsequently claiming PPR on your tax return would just be compounding it.

At https://www.property118....erty-you-have-lived-in/ , I see:
Quote:
It is important to note that PPR relief claims are often investigated by HMRC. For this reason it is imperative to be able to prove, beyond any shadow of doubt, that the property was indeed your Principal Private Residence. Examples of how this can be achieved are Council Tax records, bank statements, voters roll, utility bills, doctors and dentists records etc. The more evidence the better of course.
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Ad B on 27/09/2021(UTC), ANDREW FOSTER on 27/09/2021(UTC)
Ad B
Posted: 27 September 2021 10:51:51(UTC)
#27

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Dentmaster;187774 wrote:
If you sell the house nothing will trigger that to HMRC.


See here: https://www.taxation.co....uter-and-investigations

HMRC Connect software has been 10 years plus in the making, and is starting to have a real impact.
Anyone who reads the article will likely not forget to declare anything ever again...
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Tim D on 27/09/2021(UTC)
A Reader
Posted: 27 September 2021 11:46:54(UTC)
#30

Joined: 29/08/2019(UTC)
Posts: 20
@Ad B : May I pick your brains? I know someone who has dutifully been reporting rental income on SA for the last 15-20 years but prior to that went for a few years without reporting it. First question: If the property is sold in the next 5 years and CGT CORRECTLY calculated, is this likely to sound alarms at HMRC? Second question: more generally, how far back do investigations go?
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D Bergman
Posted: 27 September 2021 12:30:03(UTC)
#31

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A Reader;187838 wrote:
@Ad B : May I pick your brains? I know someone who has dutifully been reporting rental income on SA for the last 15-20 years but prior to that went for a few years without reporting it. First question: If the property is sold in the next 5 years and CGT CORRECTLY calculated, is this likely to sound alarms at HMRC? Second question: more generally, how far back do investigations go?


HMRC can investigate up to the past 20 years (and possibly more? - would welcome correction) in cases of fraud, but their general limit is 6 years.

The question for HMRC might be when the property was purchased vis a vis when rental income was first reported.

All I can say is that in my experience I have not heard of an investigation going back more than 6 years.
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3 users thanked D Bergman for this post.
Tim D on 27/09/2021(UTC), Jimmy Page on 27/09/2021(UTC), A Reader on 27/09/2021(UTC)
Ad B
Posted: 27 September 2021 12:32:24(UTC)
#32

Joined: 20/04/2020(UTC)
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Was thanked: 321 time(s) in 185 post(s)
D Bergman;187846 wrote:
A Reader;187838 wrote:
@Ad B : May I pick your brains? I know someone who has dutifully been reporting rental income on SA for the last 15-20 years but prior to that went for a few years without reporting it. First question: If the property is sold in the next 5 years and CGT CORRECTLY calculated, is this likely to sound alarms at HMRC? Second question: more generally, how far back do investigations go?


HMRC can investigate up to the past 20 years (and possibly more? - would welcome correction) in cases of fraud, but their general limit is 6 years.

The question for HMRC might be when the property was purchased vis a vis when rental income was first reported.

All I can say is that in my experience I have not heard of an investigation going back more than 6 years.



Seconded. Go to sleep at night.
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1 user thanked Ad B for this post.
A Reader on 27/09/2021(UTC)
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