How do the authorities check if someone is a first time buyer?

uknick

My brother will be buying a house when he comes back to the UK after nearly 10 years out of the country. He mentioned to me the other day about taking advantage of the new FTB stamp duty rules. However, in the past he's owned three properties in the UK, the last being sold September 2017.

I've strongly advised him against making a fraudulent claim. But, when he asked how would they know, I couldn't really say apart from suggesting they may do a national insurance number check.

Can anyone shed some light as to what checks the authorities make?

bigisi

uknick wrote: »

My brother will be buying a house when he comes back to the UK after nearly 10 years out of the country. He mentioned to me the other day about taking advantage of the new FTB stamp duty rules. However, in the past he's owned three properties in the UK, the last being sold September 2017.

I've strongly advised him against making a fraudulent claim. But, when he asked how would they know, I couldn't really say apart from suggesting they may do a national insurance number check.

Can anyone shed some light as to what checks the authorities make?

Not may - will.

Not sure if anything will happen other than him being declined the FTB incentives but he's runs the risk of committing mortgage fraud if he's going to try and tell lies to get them.

Pixie5740

It’s not mortgage fraud it’s tax evasion. The SDLT form requires you NI Number so HMRC will already know he has bought properties previously.

Pixie5740

Will he be telling HMRC about any capital gains made on the property sold in 2017?

G_M

NI number and Land registry search.

They'll know (thank goodness).

Best result he could hope for is that they charge the extra SDLT plus late-payment fee.

Worst result is they bring charges for tax evasion.

kinger101

It could be tried as common law fraud or under theft act.

https://www.sentencingcouncil.org.uk/offences/item/revenue-fraud/

I expect they'd want to make an example of someone who'd owned three properties previously.

GreenSnake

So how long do HMRC keep these land registry and NI cross matched databases?
20 years? 50 years?

What about people owning houses overseas?

I'm sure it's possible. But I have grown up seeing people claim unemployment benefits at the exact same time as working and paying taxes and NI (back in the days before "tax credits" etc, when this was NOT allowed.) They were never caught.
Also the amount of private landlords who are not paying tax on their rental income, could obviously be caught by checking council records against land registry, but aren't...

I won't be expecting anyone getting caught.

bowlhead99

GreenSnake wrote: »

I'm sure it's possible. But I have grown up seeing people claim unemployment benefits at the exact same time as working and paying taxes and NI (back in the days before "tax credits" etc, when this was NOT allowed.) They were never caught.

Were they never caught because although you didn't want them to be illegally sponging off your taxes, you and the other people in the neighbourhood never bothered to report them to the dole office on a weekly basis until someone there raised an eyebrow? If that's the reason they got away with it, more fool you.

I won't be expecting anyone getting caught.

If you cheat on your taxes (whether income tax, CGT, stamp duty or whatever) you are basically betting on there never ever being anyone in your life who knows or suspects you did it and dislikes you enough to call a tax evasion hotline a few weeks in a row until HMRC gets bored of receiving the calls and investigate.

- if OP's brother has owned multiple properties before there will be people who know he has owned property before - or people he meets in the future at work or socially who will probably find out casually that he owned property a decade plus ago.

- some of those people will know or find out in the future that he moved back to UK and bought a property in a period where there was no stamp duty if you said that you were a first time buyer.

- if any of those people have a falling out with him they can easily call HMRC and say that they heard him and others talking about how he said he was FTB but wasn't, because he'd save thousands in tax. Even if they didn't actually hear that but are just guessing he's the sort of fella who might, and they don't really like him for whatever reasons.

HMRC might not bother to follow up, if they think the land registry and NI number records aren't good enough to easily check. But if they do want to look into it (especially when they get multiple calls from the person who doesn't like him, or that person's pals, just for a laugh) they might write him a quick letter to ask if he ever made a mistake when claiming FTB exemption.

When he gets the letter he will have to either double down on his lie and hope the historic land registry records and tax office records are inadequate to convict him - or pay up, pay a late payment penalty, pay a fine and have a permanent black mark with HMRC for being the kind of person who "forgets" they should pay thousands of pounds in taxes.

Some people would take the risk. I wouldn't myself, given the reputational risk of being labelled a tax dodger who had to pay fines to HMRC for incorrect statements and non-payment while at the same time trying to hold down a job as a highly reputable business professional. Whereas for others, getting away with it for a few years and paying a fine later would be a badge of honour among their working-class mates, having almost got away with screwing over the government for a change.

So, lying on tax forms will be the choice of some, and I'm sure a portion of them will get away with it scot free. Wouldn't chance it myself though.

GreenSnake

bowlhead99 wrote: »

Were they never caught because although you didn't want them to be illegally sponging off your taxes, you and the other people in the neighbourhood never bothered to report them to the dole office on a weekly basis until someone there raised an eyebrow? If that's the reason they got away with it, more fool you.

If you cheat on your taxes (whether income tax, CGT, stamp duty or whatever) you are basically betting on there never ever being anyone in your life who knows or suspects you did it and dislikes you enough to call a tax evasion hotline a few weeks in a row until HMRC gets bored of receiving the calls and investigate.

- if OP's brother has owned multiple properties before there will be people who know he has owned property before - or people he meets in the future at work or socially who will probably find out casually that he owned property a decade plus ago.

- some of those people will know or find out in the future that he moved back to UK and bought a property in a period where there was no stamp duty if you said that you were a first time buyer.

- if any of those people have a falling out with him they can easily call HMRC and say that they heard him and others talking about how he said he was FTB but wasn't, because he'd save thousands in tax. Even if they didn't actually hear that but are just guessing he's the sort of fella who might, and they don't really like him for whatever reasons.

HMRC might not bother to follow up, if they think the land registry and NI number records aren't good enough to easily check. But if they do want to look into it (especially when they get multiple calls from the person who doesn't like him, or that person's pals, just for a laugh) they might write him a quick letter to ask if he ever made a mistake when claiming FTB exemption.

When he gets the letter he will have to either double down on his lie and hope the historic land registry records and tax office records are inadequate to convict him - or pay up, pay a late payment penalty, pay a fine and have a permanent black mark with HMRC for being the kind of person who "forgets" they should pay thousands of pounds in taxes.

Some people would take the risk. I wouldn't myself, given the reputational risk of being labelled a tax dodger who had to pay fines to HMRC for incorrect statements and non-payment while at the same time trying to hold down a job as a highly reputable business professional. Whereas for others, getting away with it for a few years and paying a fine later would be a badge of honour among their working-class mates, having almost got away with screwing over the government for a change.

So, lying on tax forms will be the choice of some, and I'm sure a portion of them will get away with it scot free. Wouldn't chance it myself though.

Well, yes of course if someone tipped off HMRC, I'd expect the tax dodger to get caught.
I'd have guessed one call would be enough, but never having pestered HMRC about someone else's affairs, I wouldn't know.

I don't go around boring other people with my stamp duty details, so I wouldn't expect anyone else to know my financial situation. I certainly wouldn't go around boasting that I'd committed fraud.

My point is that what should be a fairly simple system, is actually incredibly ineffective.

Don't believe the media hype.
I know a girl who was driven around three different council houses, by her support worker, turning each one down. Yet the media will tell you there's a huge long "waiting list".

No, there isn't. There's being on the inside of the system and there's being outside the system.
Of course, sleeping with the guy who's allocating the houses may have something to do with that case I mention...

theartfullodger

They monitor forums and get real names of users then work from there. Simple really.

GreenSnake

Quite a lot of land ownership has never been registered with the land registry in this country anyway. Not sure if this includes dwellings? I seem to recall looking up a few houses in the past, only to find they'd never been registered.

Other countries have land registries, but I think the idea of HMRC searching every buyer against every other country's database seems unlikely to me.

And what about dodgy countries that you can't trust, e.g. Zimbabwe etc?