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.
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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:
If you take part in this campaign and tell HMRC about any gain that you haven't previously disclosed:
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:
If you decide you are eligible to take part in this campaign you must tell HMRC. You have until 9 August 2013 to do so, this is called 'making a notification'.
To make your notification you will need to tell HMRC:
There are three ways you can notify HMRC to take part in the Property Sales campaign:
You can ask your agent or accountant to notify HMRC on your behalf using any of the three methods above.
At this stage you only have to tell HMRC that you will be making a disclosure. You will give details of the amounts involved when you make your disclosure.
Once HMRC has received your notification they will send you a letter with your unique Disclosure Reference Number (DRN) to use when you contact them. The letter will also give you a Payment Reference Number to use when you make payment.
If you decide to withdraw your notification please contact HMRC immediately and explain why. If you don’t contact HMRC, they may take follow-up action because you’ve not made a disclosure.
Once you have determined that you are eligible for this campaign you can work out the gain you need to report to HMRC. HMRC cannot provide individual advice on calculating how much you should pay so you may want to seek independent professional advice.
You’ll need the following information to help you calculate your gain:
You normally use the price you paid for your property when working out your gain but there are some circumstances where you would use the market value instead. Examples would be if you inherited the property, received it as a gift, gave it away or acquired it before 31 March 1982. If you need to use the market value of your property you must provide the valuation.
You can ask HMRC to check your valuation by submitting form CG34 Post-transaction Valuation Checks for Capital Gains.
It can take up to two months to check a valuation using this method. If your ability to submit your disclosure by the deadline is affected by such a delay please contact the Property Sales Campaign Helpline. They will help to agree a reasonable timeframe for you to return your disclosure.
If you calculate that you have made a loss you may be able to deduct it from a gain you make in the same year or future years. The losses must meet certain conditions and must be claimed in writing within a time limit. For information on how to calculate and report a loss to HMRC see the links below.
You don’t usually have to pay Capital Gains Tax when you sell or dispose of your own home. This is because you qualify for Private Residence Relief if you satisfy two conditions. For the whole time you've owned it both of the following must apply:
To make a voluntary disclosure you need to complete the disclosure form and:
You should start getting together your information and records as soon as possible.
There are two ways for you to tell HMRC what you owe:
You will find detailed information within the form to help you to complete it.
If you can't access the form online please contact the Property Sales Campaign Helpline to request a form and guidance.
If you need help with making your disclosure please ask your tax adviser, if you have one, or you can phone the helpline for further advice.
You must complete and send your disclosure form to reach HMRC by 6 September 2013.
HMRC expects you to make a full and complete disclosure. If you fail to make a disclosure or your disclosure is later found to be false, HMRC may take action.
You will need to calculate how much tax, interest and penalty you owe for each year of the disclosure. HMRC have provided a calculator that will help with this.
This calculator will help you work out your Capital Gains Tax, Income Tax, Class 4 National Insurance contributions, interest and penalties for the tax years 2007-08 to 2011-12. This calculator should only be used to help you complete your voluntary disclosure if your tax affairs are straightforward, and you are only entitled to basic personal allowances. It cannot be used in any other circumstances.
The latest year you can include in your disclosure is 2011-2012. If you have gains or income to report for 2012-13 you should complete a Self Assessment Tax Return.
If you have already been issued with tax returns for 2010-11 or later years and you have not returned them you should complete these and submit them rather than include the years in your disclosure. If you have not been issued with tax returns for these years or have already submitted them and now wish to report previously undeclared income you can include this income in your disclosure.
If you have income or gains to report for years prior to 2007-08 you will need work this out yourself. There is more information available at the HMRC website to help you but some of these calculations can be complex so you might want to consider seeking independent professional advice.
HMRC charges interest if you pay tax or National Insurance contributions late. They charge interest from the date your tax and National Insurance contributions were due until the date you actually pay. Interest is calculated on a daily basis.
When HMRC receive your disclosure they will send you an acknowledgment as soon as possible. If you haven’t received an acknowledgement within two weeks of sending your disclosure please telephone the Property Sales Campaign Helpline.
HMRC will consider the disclosure under the terms of a voluntary disclosure. If HMRC accepts your disclosure as complete and accurate you will get a letter confirming this. If HMRC cannot accept your disclosure for any reason, they will contact you or your adviser, if you have one, to let you know.
You must make your payment to HMRC at the same time as you send in your disclosure. If you need to talk to HMRC about your ability to pay in full you must do so at an early stage. You should make sure you have an agreed payment arrangement in place before the disclosure and payment deadline. The disclosure form will provide more detailed information on how you can pay.
If you need to speak to someone for further advice call the Property Sales Campaign Helpline.
If your undisclosed income is not covered by the Property Sales campaign you should contact the Voluntary Disclosure Helpline.