HMRC turns a blind eye to low value 2nd home sales?

Cook_County

seven-day-weekend wrote: »

We went to live in Spain in September 2004.

In September 2005, we sold our investment property in the UK. We paid £35000 for it in 1997 and sold it for £85000. It had never been our main home.

When I rang to ask the taxman what we should do about this, we were told that because we had sold it when we were Spanish residents, then providing we remained Spanish residents until after 6th April 2009, we needn't declare the sale or pay any CGT.:beer:

We were going to stay resident in Spain until about that time or a bit later anyway, but it's quite exciting to think of ourselves as tax exiles!:rotfl:

The "taxman" you spoke with is incorrect. The gain gets reported in the UK in 2005/06 and you then claim to be not resident and not ordinarily resident if this applies. I suspect that HMRC would not agree you are not UK resident and ordinarily resident unless you never visited the UK at all in 2005/06.

I would suggest taking professional advice to ensure any declarations due are made at this stage.

guppy

The taxman generally doesn't turn a blind eye...but that's not to say he is all seeing and has time to chase everyone either...

To paraphrase Harry Callahan, your friend has got to ask himself a question, "Do I feel lucky?" Well do ya, punk?

Thing is, it's not just being lucky this year. If for any reason your friend's affairs are examined at a later date, this then might come to light too.

Being an honest and generally risk-averse chap myself, I'd pay up and sleep well at night.

teralin

Seven-day-weekend - Please note that you are not tax exiles. You should be registered to pay tax in Spain within 3 months of becoming resident. Capital gains tax on sales of any UK property is due to the Spanish Hacienda as is annual wealth tax on all worldwide assets. You should also be paying income tax on any income regardless of source unless it is a private government pension (eg Civil Service) where it continues to be taxed at source by the UK.

seven-day-weekend

Cook_County wrote: »

The "taxman" you spoke with is incorrect. The gain gets reported in the UK in 2005/06 and you then claim to be not resident and not ordinarily resident if this applies. I suspect that HMRC would not agree you are not UK resident and ordinarily resident unless you never visited the UK at all in 2005/06.

I would suggest taking professional advice to ensure any declarations due are made at this stage.

I have a letter from HM Revenue and Customs telling me this and I have also been told several times on the telephone. Also I have been told by an IFA. They can't all be wrong!

seven-day-weekend

teralin wrote: »

Seven-day-weekend - Please note that you are not tax exiles. You should be registered to pay tax in Spain within 3 months of becoming resident. Capital gains tax on sales of any UK property is due to the Spanish Hacienda as is annual wealth tax on all worldwide assets. You should also be paying income tax on any income regardless of source unless it is a private government pension (eg Civil Service) where it continues to be taxed at source by the UK.

The Tax Exiles comment was meant to be a joke.

We have our tax affairs in Spain sorted out. Our main source of income IS a government pension so we don't need to mention it. Our only other source of income is so small that we do not have to pay any tax on it.