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Buy-to-let landlords and second home owners beware – the taxman is coming for you

HMRC declares war on homeowners who avoid tax

March 6, 2013

HM Revenue and Customs (HMRC) has kick-started a campaign to stop second-home owners and buy-to-let landlords from avoiding Capital Gains Tax (CGT). When you sell a property which is not your primary residence you must declare the profit and potentially pay tax on the earnings if they top the annual CGT allowance of £10,600.

The taxman has announced an amnesty for those who have not declared profits previously as long as they come forward by 9 August 2013 and pay the outstanding tax by September 6 this year. Landlords will also be targeted for not declaring rental income

Stephen Goldstraw, a partner at Manches LLP said: “Owning a second property can be appealing but it comes with a lot of tax problems, particularly if it is outside the UK. If it is rented out, there will be income tax to pay (for overseas properties both in the overseas country and in the UK).  If you sell it, there will be CGT to pay (again both in the overseas country and the UK for foreign properties)

If you’re worried about being in the mire over unpaid tax but are not sure how to proceed you may need legal help. All our members get free legal advice


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1 Comment

  1. Hi,

    can i just gain clarification on something please?

    if someone has only one property in their name and lives elsewhere, with family relatives, and sells it so as to but to let a new property, that would not incur any need to declare CGT would it? its not classed as a second home i mean, is it?

    also, in other words, being a buy to let landlord but only that one property in your name, doesn’t require declaring tax on rent does it? and would you need to advise the bank with whom you have the mortgage with, of your intention? or would they fine you or worse, if they found out you were letting your property out?

    many thanks

    Comment by jon — March 9, 2014 @ 12:02 pm

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