Property tax

Posted by ianpascall - August 21, 2019 11:22 am HMRC’s attempts to “plug all the tax gaps” continues apace.

Our Senior Partner, Ian Pascall FCA, looks at recent HMRC activities in his post including an update on HMRC’s interest in Cryptocurrencies and overseas company owners of UK properties. Read on for more news.

Overseas owned property

HMRC has been writing to occupiers of UK properties which it believes are legally owned by overseas companies. The purpose of the letters is, ostensibly, to verify whether any appropriate income tax has been deducted at source.

Paying the right amount of tax

HMRC states: “You may need to take tax from your rent. We want to make sure you take off the right amount of tax and pay this to us. We also want to help you to understand how to do this…. To help you take off the right amount of tax from the rent you pay, we need some information about the property you live in ….”

Information required by HMRC

Information requested by HMRC is wide-ranging. Hence, what is supposed to be a letter about whether income tax should have been deducted by tenants of properties held by overseas landlords, has in fact much broader potential implications relating to matters such as the Annual Tax on Enveloped dwellings, any possible occupation benefits from trusts, and any possible inheritance tax arising from the settlement of trusts.

What to do if you receive a letter

Recipients of the letters and their advisers should carefully review their position to confirm whether they are fully tax compliant in all areas where the information sought by HMRC has a bearing.

HMRC – cryptocurrencies

In our summer newsletter there was an article about the taxation of cryptocurrencies which referred to the guidance issued by HMRC at the start of this year. HMRC has followed up on this guidance and has reportedly requested that digital currency exchanges provide information about customer names and transactions presumably in the hopes of identifying tax evasion. Those people using such exchanges should check if they have a tax liability to report and, if so, to make the necessary declaration before the taxman comes knocking.

Should you need help with any of these tax issues or with any other tax problems then please do contact your local MFW office.