THE PROPERTY Sales campaign is an opportunity for you to bring your tax up to date if you have sold a residential property, in the UK or abroad, that’s not your main home.
If you made a profit but have not told HM Revenue & Customs (HMRC), you might not have paid the right amount of tax. To take advantage of the best possible terms you must voluntarily disclose your income or gains and pay what you owe by 6 September 2013.
After 6 September, HMRC will use the information it holds to target those who should have made a disclosure under this campaign and failed to do so.
Who can use this campaign?
This campaign is for you if you’ve sold, or disposed of, second or additional residential properties either in the UK or abroad. These could include a holiday home or a property that you rented out. You may also be able to use this campaign where you have sold your main home. This would normally qualify for Private Residence Relief but in some circumstances the relief is restricted. Where the entitlement to this relief is restricted Capital Gains Tax may be due if you are liable to UK taxes.
If your circumstances meant that Capital Gains Tax was due on the sale of your main home you may be able to use this campaign.
Even if you didn’t originally purchase the property you may still be liable to pay tax on the gain if you acquired the property another way. For example you may have inherited it or it may have been a gift.
Only certain people can use this campaign. It is not for you if you:
Buy and sell property as a business. These sales are subject to Income Tax rather than Capital Gains Tax.
Need to disclose a gain made by a trust, company or partnership.
If you take part in this campaign and tell HMRC about any gain that you haven’t previously disclosed:
you can assess the correct level of penalty to reflect why you have not paid the right amount of tax in the past
if your circumstances warrant it you may be able to pay what you owe by instalments
If you are eligible to take part in the campaign you must also tell HMRC about any other income or gains that you haven’t previously disclosed. This could include:
income from property or land rental (less the expenses relating to that income)
earned income not taxed before you receive it, for example, profits from another business
investment income not taxed before you receive it, for example, interest
taxed income where additional tax is payable
capital gains on the sale of other assets or properties
This is a chance to get things right now and know exactly how much it will cost to sort out your tax for earlier years.
Source – Cyprus property news