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  • FIRST POST
    • uknick
    • By uknick 18th Jun 17, 11:24 AM
    • 615Posts
    • 270Thanks
    uknick
    Selling a second home and CGT. Paperwork involved?
    • #1
    • 18th Jun 17, 11:24 AM
    Selling a second home and CGT. Paperwork involved? 18th Jun 17 at 11:24 AM
    Whilst I know the various CGT calculations involved in selling a second property, I'm not up to speed with the paperwork involved.

    A friend is selling a second property after owning it for a fair few number of years. For most of that time it's been rented out to a tenant claiming housing benefit.

    My friend isn't intending to tell HMRC about the sale and possible gain of about £100k.

    It also appears they've never done a self assessment for the rental income; as they only ever broke even each year they didn't think they had to.

    I've strongly advised them to tell HMRC but, if they don't tell HMRC, what are the chances HMRC will find out? Does the conveyancing solicitor complete paperwork which indicates if the property is the principal residence of the seller? Or, is it all down to the seller coming clean?
Page 1
    • xylophone
    • By xylophone 18th Jun 17, 12:08 PM
    • 21,643 Posts
    • 12,448 Thanks
    xylophone
    • #2
    • 18th Jun 17, 12:08 PM
    • #2
    • 18th Jun 17, 12:08 PM
    https://www.theguardian.com/money/2013/mar/05/hmrc-tax-crackdown-second-home-sales
    • 00ec25
    • By 00ec25 18th Jun 17, 1:42 PM
    • 4,066 Posts
    • 3,317 Thanks
    00ec25
    • #3
    • 18th Jun 17, 1:42 PM
    • #3
    • 18th Jun 17, 1:42 PM
    the sale is notified to the Land Registry
    the Land Registry informs HMRC
    HMRC knows it is not the main home .....
    • uknick
    • By uknick 18th Jun 17, 3:25 PM
    • 615 Posts
    • 270 Thanks
    uknick
    • #4
    • 18th Jun 17, 3:25 PM
    • #4
    • 18th Jun 17, 3:25 PM
    the sale is notified to the Land Registry
    the Land Registry informs HMRC
    HMRC knows it is not the main home .....
    Originally posted by 00ec25
    Apparently, and I say it with deliberate cynicism, they told HMRC 7 years ago it was their principal residence. I find this hard to believe as one would think it would trigger a flag against the housing benefit claim for the property if the landlord moves into the rented property.

    And, I know for a fact, they lived in another property they had owned for 20 years and sold about 2 years ago with no CGT paid. Since then they've been in rented accommodation.

    I did find this link but, as it's 4 years since article and HMRC have made no contact about them renting a property out to an housing benefit claimant and not declaring it, I'm not sure how effective the clampdown has been.

    I think you can gather from what I've said they appear to be a serial tax evader, and have got away with it in the past. Which is why I was wondering if people actually get caught if they've never been on HMRC's radar.
    • xylophone
    • By xylophone 18th Jun 17, 7:56 PM
    • 21,643 Posts
    • 12,448 Thanks
    xylophone
    • #5
    • 18th Jun 17, 7:56 PM
    • #5
    • 18th Jun 17, 7:56 PM
    Well, if you're sure of your facts, here's your option.....


    https://www.gov.uk/government/organisations/hm-revenue-customs/contact/customs-excise-and-vat-fraud-reporting

    Otherwise, if HMRC find out about the fraud/tax evasion...

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/594926/CC-FS18a_02_17.pdf

    Why you should tell us about information that you’ve withheld before
    we find out about it


    If you know that you’ve withheld information, you should tell us straightaway. If you tell us about information that you’ve withheld before you had any reason to believe that we were about to find out abouit, we call this an ‘unprompted disclosure’. If you tell us about information that you’ve withheld at any other
    time, we call it a ‘prompted disclosure’. The penalty percentage rate for unprompted disclosures will be smaller than for prompted disclosures.
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