Tax Investigations: Principle Private Residence Relief And Stamp Duty

HMRC are using this database for many purposes including finding landlords who have not notified to HMRC the fact that they are letting the property (even though in many instances there will be a loss) to launch a tax investigation into the letting of the property.

Technically a landlord should declare the rental income on a property (even if it is making losses) and HMRC consider that this is tax evasion and should be subject to a tax investigation. In these instances not only will HMRC be asking for information relating to rental income but often want full information as to how the property was funded and if the property has been sold they will be looking to collect capital gains tax from their tax investigation.

HMRC are also using this database to mine for information to see if someone has claimed that their house is exempt from capital gains tax as it is their home. HMRC are specifically targeting people for tax investigations where they own two or more homes and also in cases where people are selling their homes not long after purchase.

The topic of what is a home and what is not has been in the press over the last year or two relating to MPs and their expense claim. It would appear that following the revelations about this that HMRC decided to target people for tax investigations who do not fit in with the normal pattern of living in one house for a number of years.

There can be many reasons that people move home (or have more than one home) and in some instances HMRC have targeted people who have genuine reasons for this for a tax investigation and then demanded such a standard of evidence that no normal person would have this information to hand. Although we believe that generally this is a technical point, HMRC have been pursuing these tax investigations as though the individuals were guilty of the most heinous of tax evasion, often based on the most flimsy of facts.
The matter of whether a person should pay tax on the sale of their home is a very technical point and unless handled correctly then HMRC can make the tax investigation a long and arduous one with all of the problems this has for the individual.

At Gilbert Tax we have dealt with a many cases relating to undeclared income from property and are seeing more and more cases relating to the claim to principle private residence relief and tax investigations into these by HMRC.

Gilbert Tax Will deal with HMRC for you