UK CGT - But Now Living Overseas - Help Please !!

emitherme

Guys, any help with below would be most welcome.


Can the Inland Revenue Pursue you Overseas for :

1) Non Disclosure of Sale of Property (3 years ago not disclosed on return in error). Even though you are no longer a UK Resident. (Left 2 years ago)

2) If there is a payment of CGT due, can they pursue the debt overseas, if so how ?

3) If you dont have the funds available, can you make payment offer ?

4) If CGT is due, and you can't provide the documents for any Tax Relief, ie Building work, or Contracts of Sale - How would they determine the amounts owed. Think the final profit from the sale was approx 30k (2006)

5) If property was Jointly owned (Rented Out) can each owner claim the Taper or Tax Relief Allowance ?

6) Can the IR Prosecute you for Non Disclosure/Non Payment (even living outside the UK)

Must be more questions to come, but any help for now will be welcome.

Thanks

pete80

emitherme wrote: »

Guys, any help with below would be most welcome.


Can the Inland Revenue Pursue you Overseas for :

1) Non Disclosure of Sale of Property (3 years ago not disclosed on return in error). Even though you are no longer a UK Resident. (Left 2 years ago)

2) If there is a payment of CGT due, can they pursue the debt overseas, if so how ?

3) If you dont have the funds available, can you make payment offer ?

4) If CGT is due, and you can't provide the documents for any Tax Relief, ie Building work, or Contracts of Sale - How would they determine the amounts owed. Think the final profit from the sale was approx 30k (2006)

5) If property was Jointly owned (Rented Out) can each owner claim the Taper or Tax Relief Allowance ?

6) Can the IR Prosecute you for Non Disclosure/Non Payment (even living outside the UK)

Must be more questions to come, but any help for now will be welcome.

Thanks

I wouldn't like to be in your shoes with this problem hanging over me and it won't go away easily or quickly just because you are living overseas.
IMO I would get as many figures & dates together as possible and speak to a Tax Adviser who is knowledgeable about property taxes (cgt and income) as well as the Ex-Pat rules and Treaties if they apply in your case.

I moved out of UK last year and used a company to sort out my final years returns and it made things easier, worth the extra money over what an accountant would charge.

Two neighbours of mine back in England both lost a large portion of their pensions when they returned from abroad.

I don't know if you declared your rental income while you had this property but if not then you could lose some reliefs like lettings relief, PPR relief etc. This is why I would contact a good Tax Adviser to sort things out for you and hopefully get the final bill down a bit. There are many advisers out there but I used Britishtaxpayers.com but they are not too cheap, I think you get what you pay for.

Did you live in the property at any time, this can reduce the tax payable if the HMRC do allow your LR and PPR but you may be asked to prove that you lived there. Normally you write into HMRC to nominate your main residence but sufficient paperwork like utility bill, bank statements etc showing your connection with that address can suffice.
http://www.hmrc.gov.uk/helpsheets/2007/ir283.pdf is the notes to help you with Lettings relief and Principle Private Residence relief.

Also if you have more detailed questions with figures and dates it would be worth posting on taxationweb.co.uk as there are some tax advisers and ex-HMRC guys who will help you.

A good tax adviser is likely to cost in the region of £150 per hour.

Also if you both owned the property you can get two amounts of CGT allowance so the final result shouldn't be too bad. Please post back and let us know how you get on and good luck.

emitherme

Many Thanks for your response Pete, At the moment UK Tax office dont have my address (Mail was forwarded to a PO Box) - At the moment, they dont know that I have recieved the letter........My question is can they trace/would they trace, I reckon so !!!

I dont want to be prosecuted and want to be honest with them, another problem is that I just dont have any paperwork that they are asking for ie purchase/sale, any building work done etc - lost all that when moved overseas !!

Guess I need some help here, Thanks again

pete80

emitherme wrote: »

Many Thanks for your response Pete, At the moment UK Tax office dont have my address (Mail was forwarded to a PO Box) - At the moment, they dont know that I have recieved the letter........My question is can they trace/would they trace, I reckon so !!!

I dont want to be prosecuted and want to be honest with them, another problem is that I just dont have any paperwork that they are asking for ie purchase/sale, any building work done etc - lost all that when moved overseas !!

Guess I need some help here, Thanks again

If paperwork lost, all the more reason to get help from a tax adviser. If the profit was only £30k and you have 2 lots of CGT plus selling fees and costs the the bill won't be too bad.

It will be less painful if you deal with it now rather then let penalties and interest build up, the longer you leave it the harder it will be to claim for various expenses and allowances.

fengirl_2

HMRC would not prosecute you for non payment of CGT on a £30k gain! They only prosecute in extremely serious cases. They would limit action to the tax lost, a penalty, (up to 100% of the tax lost, but mitigated according to your cooperation, etc), and interest.
Get advice from a tax accountant who can deal with HMRC on your behalf, negotiate relief where you dont have receipts, etc and negotiate on the final settlement.

emitherme

fengirl wrote: »

HMRC would not prosecute you for non payment of CGT on a £30k gain! They only prosecute in extremely serious cases. They would limit action to the tax lost, a penalty, (up to 100% of the tax lost, but mitigated according to your cooperation, etc), and interest.
Get advice from a tax accountant who can deal with HMRC on your behalf, negotiate relief where you dont have receipts, etc and negotiate on the final settlement.

Many Thanks, all seems good advice - i will contact British Taxpayers.com

My other concern is....if i dont have the funds available will HMRC allow payments over a period of time.

Another question - will they look to trace you overseas ? and could they force legal action in another country....silly questios i know, but am not sleeping !!

Thanks again

pete80

emitherme wrote: »

Many Thanks, all seems good advice - i will contact British Taxpayers.com

My other concern is....if i dont have the funds available will HMRC allow payments over a period of time.

Another question - will they look to trace you overseas ? and could they force legal action in another country....silly questios i know, but am not sleeping !!

Thanks again

You should be provided with the chance to pay over a period of time but there will almost certainly be interest charged, I think the current rate is around 2.5% per annum.

It may be possible for HMRC to trace you through a redirection service, then your P.O. Box provider but that is just a possibility, don't know for sure if they will pursue overseas.

harryhound

The world is full of people who have "done a runner".
The tax man wrote to me asking if I knew where my neighbour had gone - unfortunately I don't.
My daughter is having a similar problem - She does know, but it is N.Cyprus.

A friend got a contract in Kuwait; he reconned that they had a brew up in the bath and a regular party over there to celebrate the latest ex-pat who had managed to reach a settlement with creditors and the tax man, that would allow a return to the UK.

I suppose it feels a bit like having your death sentence transmuted to deportation to Van Diemens Land.
You could serve a minimal sentence, but you were never allowed to return to the mother country.
http://www.google.co.uk/url?q=http://en.wikipedia.org/wiki/Van_Diemen%27s_Land&ei=At16StKqMpT2-AbV8JA8&sa=X&oi=spellmeleon_result&resnum=1&ct=result&usg=AFQjCNHutKVNGwNy5O67GR8KYZFq1yAAEg
http://en.wikipedia.org/wiki/Port_Arthur,_Tasmania

harryhound

jimmo wrote: »

Yes they will seek to trace you overseas, and yes, they can take legal action in other countries. See here.
http://www.hmrc.gov.uk/manuals/dmbmanual/DMBM560200.htm

It would appear that only the EU countries plus Norway have agreed to co-operate over enforcing these debts.
Interestingly it would appear that the original poster can return to Scotland after 20 years but beware of the customs post at Gretna Green:D

As it always says in these tax planning schemes and as a famous comedian/jocky might testify, plus those with accounts in (say) Luxembourg, these rules are subject to change. Remember the days of "The costa del Crime"?

emitherme

Thank You Harry & Jimmo - Pete and Fengirl.

Really not sure what to do - have e mailed a couple of Tax Companies, and await there response.

A couple of questions though - Property in Joint Names (me & wife) - are we both allowed the Taper relief (Sold in 2005/06 Tax Year) ??

Can you also cliam for renovation of property, which actually increased the value. (thus reducing the gain though)

If let, can you gain any relief ?

What taxation rate as in 2005/06 our income was taxed at 20% i think.

If they dont pursue Overseas, why worry ?? (wrong attitude - and one I wont adopt)

Sorry to be a pain, but appreciate all your help

fengirl_2

In answer to your questions, there is only one taper relief, but you and your wife each have an annual exemption.
There is no releif for letting the property - the fact that it was let gives rise to a CGT charge. However, if you ever lived in the property, there are several reliefs - you need to give us details for us to advise.
Capital improvements to the property are allowable against CGT, as are buying and selling costs, eg agents fees and legal fees.
Any gain will be taxed at your respective highest rates (22% or 40%).