Theoretical question about Capital Gains Tax

TheSpectator

FlorayG said:

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)?

No, the seller is required to declare it but if they don't HMRC be in touch and there will be penalties on top of any unpaid tax.

People can plead 'didn't know' for all sorts of things, it wont wash.

RogerPensionGuy

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

user1977

RogerPensionGuy said:

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

Where are the £20k and £40k going? Under your respective mattresses or into bank accounts?

As above, same principles apply as those who "forget" to declare their profits for Income Tax.

TheSpectator

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

RogerPensionGuy

TheSpectator said:

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

TheSpectator said:

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

I guessed its a CGT event and maybe it needs to be delared?

TheSpectator

RogerPensionGuy said:

TheSpectator said:

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

TheSpectator said:

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

I guessed its a CGT event and maybe it needs to be delared?

Guessed wrong.

RogerPensionGuy

TheSpectator said:

RogerPensionGuy said:

TheSpectator said:

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

TheSpectator said:

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

I guessed its a CGT event and maybe it needs to be delared?

Guessed wrong.

I will now be happy to dig up 10 Rolex gains from the garden and put them in premium bonds and gilts and sleep easier at night.

Bookworm105

TheSpectator said:

RogerPensionGuy said:

TheSpectator said:

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

TheSpectator said:

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

I guessed its a CGT event and maybe it needs to be delared?

Guessed wrong.

why?
I assume you accept a "rolex" is classed as jewellery, so it is more than the personal possessions limit
Capital Gains Tax on personal possessions: What you pay it on - GOV.UK

TheSpectator

Bookworm105 said:

TheSpectator said:

RogerPensionGuy said:

TheSpectator said:

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

TheSpectator said:

RogerPensionGuy said:

Forgetting houses that have lots of paperwork open to viewing.

Same question as OP.

I buy a Rolex off a nice friend for 20K and my cousin then wants to buy it off me, I sell it for 40K.

That's a 20K gain, unless I declare it, how would anyone know that 20k gain occurred  ?

What makes you think it would be liable to Capital Gains tax?

I guessed its a CGT event and maybe it needs to be delared?

Guessed wrong.

why?
I assume you accept a "rolex" is classed as jewellery, so it is more than the personal possessions limit
Capital Gains Tax on personal possessions: What you pay it on - GOV.UK

Suggest you click in the limited lifespan link within that.

Bookworm105

FlorayG said:

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)?

the underlying basis of personal taxation in the UK is SELF assessment
Unless you know then buy definition you don't know, so you employ someone who does to advise you - ie accountant/ tax specialist
The reason for doing that is you can reasonably expect HMRC to have processes in place to spot illegal behaviour.

Your post is suggestive that your attitude may be I am a criminal, I know the police are not everywhere so I think I can get away with my behaviour. You might, but you might be caught instead!