Theoretical question about Capital Gains Tax

MEM62

FlorayG said:

Who knows if you owe it? 

You do!  .....

FlorayG

MEM62 said:

FlorayG said:

Who knows if you owe it? 

You do!  .....

MY POINT IS that quite often people DON'T

FlorayG

Bookworm105 said:

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)?

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!

No it's not. I'm clearly asking what happens when people don't realise they need to pay CGT because they've never heard of it

zagfles

FlorayG said:

Bookworm105 said:

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)?

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!

No it's not. I'm clearly asking what happens when people don't realise they need to pay CGT because they've never heard of it

Same as if they break any other law they didn't realise existed. Ignorance of the law is no excuse. 

Bookworm105

FlorayG said:

Bookworm105 said:

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)?

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!

No it's not. I'm clearly asking what happens when people don't realise they need to pay CGT because they've never heard of it

and we are telling you it is exactly the same as doing something criminal, your ignorance of the fact does not mean the police won't come after you.

FlorayG

Bookworm105 said:

FlorayG said:

Bookworm105 said:

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)?

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!

No it's not. I'm clearly asking what happens when people don't realise they need to pay CGT because they've never heard of it

and we are telling you it is exactly the same as doing something criminal, your ignorance of the fact does not mean the police won't come after you.

This conversation is going round in circles but what I gather as an answer TO MY QUESTION is that nobody is required to tell a person they need to pay CGT they need to find this out for themselves? Seems a bit slapdash as most people who will owe it probably only have one instance in their whole life, when they inherit, so huge numbers of people probably are not paying it and have no idea they owe it

user1977

FlorayG said:

Bookworm105 said:

FlorayG said:

Bookworm105 said:

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)?

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!

No it's not. I'm clearly asking what happens when people don't realise they need to pay CGT because they've never heard of it

and we are telling you it is exactly the same as doing something criminal, your ignorance of the fact does not mean the police won't come after you.

This conversation is going round in circles but what I gather as an answer TO MY QUESTION is that nobody is required to tell a person they need to pay CGT they need to find this out for themselves?

Not clear what you think ought to happen instead though? Or why you're singling out CGT - when you become a landlord, nobody's required to tell you about Income Tax either, or all the other legal requirements.

FlorayG

There isn't anything I THINK ought to happen - I'm only asking what DOES happen

RogerPensionGuy

FlorayG said:

There isn't anything I THINK ought to happen - I'm only asking what DOES happen

I think the view is for example if I buy and sell 10 Rolex down the pub and just happens I'm 200K up financially overall, I should tell HMRC and pay any tax as per whatever the rules are or maybe say nothing and if my buying and selling was in cash, HMRC would have no information, but if I was doing say bank transfers or using cheques, HMRC would indeed have this information and they may launch an enquiry. 

I think I've read over the years HMRC are paying more attention to ebay and the like, so it looks like HMRC will indeed be getting more active launching enquiries. 

I've read because many people feel the tax system is unfair it drives many people to avoid tax if possible, think one fix is just use one tax rate flat across the board and tax collection value would go up and avoid much much cost for Government, businesses and individuals. 

FlorayG

Thank you @RogerPensionGuy
It's got me wondering about people who inherit, sell at profit, have no idea about CGT, spend all the money and then perhaps some years later when HMRC catch up with them they get a totally unexpected bill for thousands!
I'm reminded of a boyfriend I had years ago who was self-employed but never did a tax return because he said ( and was probably correct) that he didn't earn enough to pay tax. It was several years later HMRC sent him a tax bill (someone reported him? I don't know) for several thousand and because he had no records of what he actually DID earn he had to pay the amount they had estimated. If he had done a tax return he would have owed nothing