The UK tax office is sending out 14,000 “nudge” letters to people who may owe capital gains tax from “disposing” a property between 2018 and 2019.
The tax is usually payable on the sale or gift of a second home or let property and has to be disclosed to HMRC.
“We are writing to customers who we believe have sold a property which may have given rise to a capital gains tax charge, but who did not tell us that they had any tax to pay,” confirmed an HMRC spokesperson.
The number of letters sent out this year suggest HMRC believes around 2,000 people have undeclared capital gains to disclose for 2018/19, according to Graham Arnott of Armstrong Watson accountants.
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HMRC is encouraging residential property owners to “review their tax affairs” in respect of property disposal.
“Taxpayers will be alarmed by receiving these letters, but they should take care not to ignore them and to take immediate advice or they too could face fines and interest charges,” advised Suzanne Briggs, partner of tax firm Blick Rothenberg.
And people disposing of a residential property this financial year need to ensure they do not fall foul of the new 30 day reporting rule for capital gains tax which came into effect from 6 April 2020.
The tax must now be paid within 30 days of selling a residential property. Late returns could face a penalty.
“There has been little publicity about this new regime and the short filing deadline will catch many people out. HMRC should be proactively educating taxpayers rather than penalising them for late filing after the event. Anyone who thinks that they owe money should deal with it now or they could face fines and interest charges,” said Briggs.