HM Revenue & Customs HQ in London. :: SUR
British tax residents with second or holiday homes in Spain are being urged by the UK tax authority, HM Revenue & Customs (HMRC), to “come clean” about any unpaid tax or capital gains, despite the deadline to avoid increased penalties for not doing so having passed last Friday.
HMRC’s Property Sales Campaign is targeting those selling homes in the UK or overseas, where capital gains tax should be paid on any profits made. Property owners had until 9th August to declare any unpaid tax on property sales and have until 6th September to pay the tax owed.
The Revenue is warning those who have sold holiday homes in Spain, and elsewhere, that a failure to report accurately could mean they face tax investigations, plus fines and interest could be added to the pending tax bill.
“It is better to come to us before we come to you. After 6th September, HMRC will use information it holds about property sales, in the UK and abroad, to identify people who have not paid what they owe. Penalties – or even criminal prosecution – could follow,” asserts Marian Wilson, Head of HMRC Campaigns.
Another Revenue spokesman tells this newspaper: “The way the system is set up is that those who voluntarily disclose the information, even though the deadline has gone, are likely to be treated more favourably. This campaign is a chance for British taxpayers to come clean about any taxable rental income or capital gains from selling a property overseas.”
He went on to add that extra inspectors have been recruited by HMRC to collate evidence about second home sales both in the UK and abroad; and that “levels of exchangeable financial information between institutions and different authorities are now extremely well advanced.”
SUR in English understands that HMRC holds the database for all property disposals attracting Stamp Duty Land Tax in the UK, and has access to similar databases in Spain. Once the campaign disclosure period closes, the Revenue will compare property disposal data with people’s tax records to establish whether they have told HMRC about the sale or disposal of second and holiday homes.
Those who feel they might be affected by The Property Sales Campaign should call HMRC as soon as possible on +44 845 601 8819.
It is not known, or certainly not yet anyway, how many people who have sold homes in Spain are likely to be affected by this latest action from HMRC. However, one Marbella-based cross border tax specialist said it is “likely to be thousands.”
On the condition he would not be named, a British taxpayer who has recently sold a home on the Costa del Sol tells SUR in English: “I have missed the deadline as I didn’t even know about it – and so now, through my ignorance, I am liable for hefty penalties. I will pay anything that might be owed before 6th September, but I can’t help feeling that HMRC deliberately did not publicise this widely enough in advance in order to be able to issue fines.”