Capital Gains Tax Question

meredith_2

How does this get requested. i.e. how do the tax people know when a house is sold and capital gains tax is due?

Cook_County

Because you declare it on your tax return. (If you are thinking of land in the UK then they theoretically they know anyway because you would notify them by stamping the transfer deed.)

meredith_2

Cook_County wrote:

Because you declare it on your tax return. (If you are thinking of land in the UK then they theoretically they know anyway because you would notify them by stamping the transfer deed.)

This is whats confusing me, I never get sent a tax return. Its the sale of a flat that belongs to me and I'm just curious how the tax people would know about it. Whats to stop people just not saying anything? Do the solicitors inform the tax office at the point of sale?

WHA

It is up to you to ask the tax office for a tax return - "self" assessment means just that.

The IR will know from a variety of sources - Stamp Duty is paid to the Inland Revenue and there is a record of the transaction on the Land Registry. If you don't tell them and don't pay any tax due, you will face paying the tax, interest and penalties of up to 100% of the tax due when they find out, so it's really not worth the risk.