Theoretical question about Capital Gains Tax

FlorayG

Who knows if you owe it? I've only even known such a thing existed since I bought an investment property. I can easily imagine a scenario where someone inherits a property, doesn't get it valued because they plan to rent it out, rents it for a few years and then sells. Obviously they owe CGT on the sale profit but who would know and how would it be calculated? Does the Land Registry let HMRC know that a person owns two properties?

Bigphil1474

Presumably, when you come to sell, the solicitor handling the sale would be required to identify if there are any tax requirements to be met, including CGT. Also presumably, if they don't do that, they'd get it in the neck as well as the seller being chased for the unpaid tax.

Keep_pedalling

If you inherit a property it would be valued for probate and once granted it becomes a public record. The value is also recorded with the land registry when the property is transfered to you.

user1977

Bigphil1474 said:

Presumably, when you come to sell, the solicitor handling the sale would be required to identify if there are any tax requirements to be met, including CGT. Also presumably, if they don't do that, they'd get it in the neck as well as the seller being chased for the unpaid tax.

No, where did you get the idea that solicitors go around policing CGT?

But it's much the same "how would they know" question for any other self-assessed tax, e.g. Income Tax for the self-employed - HMRC have their methods, and public registers such as the Land Registry are fairly obvious sources of information.

FlorayG

user1977 said:

Bigphil1474 said:

Presumably, when you come to sell, the solicitor handling the sale would be required to identify if there are any tax requirements to be met, including CGT. Also presumably, if they don't do that, they'd get it in the neck as well as the seller being chased for the unpaid tax.

No, where did you get the idea that solicitors go around policing CGT?

But it's much the same "how would they know" question for any other self-assessed tax, e.g. Income Tax for the self-employed - HMRC have their methods, and public registers such as the Land Registry are fairly obvious sources of information.

So someone could just not pay it, just like some people get away with a second self-employed income that they never declare? I would say most of the people I know have no knowledge of CGT and wouldn't have a clue that they might owe it

silvercar

Inland revenue staff trawl through recent property sold on the Land Registry in order to track down unpaid tax.

user1977

FlorayG said:

user1977 said:

Bigphil1474 said:

Presumably, when you come to sell, the solicitor handling the sale would be required to identify if there are any tax requirements to be met, including CGT. Also presumably, if they don't do that, they'd get it in the neck as well as the seller being chased for the unpaid tax.

No, where did you get the idea that solicitors go around policing CGT?

But it's much the same "how would they know" question for any other self-assessed tax, e.g. Income Tax for the self-employed - HMRC have their methods, and public registers such as the Land Registry are fairly obvious sources of information.

So someone could just not pay it, just like some people get away with a second self-employed income that they never declare? I would say most of the people I know have no knowledge of CGT and wouldn't have a clue that they might owe it

Yes, shock news that some people evade tax and some of those get away with it.

Rather worrying that they're getting involved in property investments with no understanding of the taxes involved.

FlorayG

user1977 said:

FlorayG said:

user1977 said:

Bigphil1474 said:

Presumably, when you come to sell, the solicitor handling the sale would be required to identify if there are any tax requirements to be met, including CGT. Also presumably, if they don't do that, they'd get it in the neck as well as the seller being chased for the unpaid tax.

No, where did you get the idea that solicitors go around policing CGT?

But it's much the same "how would they know" question for any other self-assessed tax, e.g. Income Tax for the self-employed - HMRC have their methods, and public registers such as the Land Registry are fairly obvious sources of information.

So someone could just not pay it, just like some people get away with a second self-employed income that they never declare? I would say most of the people I know have no knowledge of CGT and wouldn't have a clue that they might owe it

Rather worrying that they're getting involved in property investments with no understanding of the taxes involved.

But that's what I  mean - I read so many posts about 'accidental landlords' or people who inherited a house and don't know what to do about it, I bet loads of these people genuinely wouldn't even know they owed CGT

user1977

FlorayG said:

user1977 said:

FlorayG said:

user1977 said:

Bigphil1474 said:

Presumably, when you come to sell, the solicitor handling the sale would be required to identify if there are any tax requirements to be met, including CGT. Also presumably, if they don't do that, they'd get it in the neck as well as the seller being chased for the unpaid tax.

No, where did you get the idea that solicitors go around policing CGT?

But it's much the same "how would they know" question for any other self-assessed tax, e.g. Income Tax for the self-employed - HMRC have their methods, and public registers such as the Land Registry are fairly obvious sources of information.

So someone could just not pay it, just like some people get away with a second self-employed income that they never declare? I would say most of the people I know have no knowledge of CGT and wouldn't have a clue that they might owe it

Rather worrying that they're getting involved in property investments with no understanding of the taxes involved.

But that's what I  mean - I read so many posts about 'accidental landlords' or people who inherited a house and don't know what to do about it, I bet loads of these people genuinely wouldn't even know they owed CGT

Yes, and as we see from posts here they're clueless about everything else involved in being a landlord.

Bookworm105

FlorayG said:

user1977 said:

FlorayG said:

user1977 said:

Bigphil1474 said:

Presumably, when you come to sell, the solicitor handling the sale would be required to identify if there are any tax requirements to be met, including CGT. Also presumably, if they don't do that, they'd get it in the neck as well as the seller being chased for the unpaid tax.

No, where did you get the idea that solicitors go around policing CGT?

But it's much the same "how would they know" question for any other self-assessed tax, e.g. Income Tax for the self-employed - HMRC have their methods, and public registers such as the Land Registry are fairly obvious sources of information.

So someone could just not pay it, just like some people get away with a second self-employed income that they never declare? I would say most of the people I know have no knowledge of CGT and wouldn't have a clue that they might owe it

Rather worrying that they're getting involved in property investments with no understanding of the taxes involved.

But that's what I  mean - I read so many posts about 'accidental landlords' or people who inherited a house and don't know what to do about it, I bet loads of these people genuinely wouldn't even know they owed CGT

ignorance has never been a defence against a tax liability. 
failure to educate yourself on your responsibilities is justly penalised.
HMRC are informed of the details of all property sales and obviously given the sums of money involved and the ease of tracking bricks and mortar, they have invested in methods of identifying who owns what and who sold what

FlorayG

Bookworm105 said:

FlorayG said:

user1977 said:

FlorayG said:

user1977 said:

Bigphil1474 said:

Presumably, when you come to sell, the solicitor handling the sale would be required to identify if there are any tax requirements to be met, including CGT. Also presumably, if they don't do that, they'd get it in the neck as well as the seller being chased for the unpaid tax.

No, where did you get the idea that solicitors go around policing CGT?

But it's much the same "how would they know" question for any other self-assessed tax, e.g. Income Tax for the self-employed - HMRC have their methods, and public registers such as the Land Registry are fairly obvious sources of information.

So someone could just not pay it, just like some people get away with a second self-employed income that they never declare? I would say most of the people I know have no knowledge of CGT and wouldn't have a clue that they might owe it

Rather worrying that they're getting involved in property investments with no understanding of the taxes involved.

But that's what I  mean - I read so many posts about 'accidental landlords' or people who inherited a house and don't know what to do about it, I bet loads of these people genuinely wouldn't even know they owed CGT

ignorance has never been a defence against a tax liability. 
failure to educate yourself on your responsibilities is justly penalised.
HMRC are informed of the details of all property sales and obviously given the sums of money involved and the ease of tracking bricks and mortar, they have invested in methods of identifying who owns what and who sold what

That's what I'm asking. So Land registry inform HMRC (which is what I originally assumed) and then HMRC will contact the seller with a tax invoice? so a seller can't just 'forget' it (or perhaps genuinely didn't know)?