Landlords told to prepare for HMRC investigation

A large number of buy-to-let landlords are failing to declare and pay Capital Gains Tax (CGT), according to HM Revenue and Customs (HMRC).

The HMRC and Land Registry are working together to begin investigations into individuals that are not paying CGT on income from rentals or have not updated the HMRC of property disposals.

The head of taxation at the Association of Chartered Certified Accountants (ACCA), Chas Roy-Chowdhury, commented:

"HMRC is definitely becoming more aggressive to find tax evaders and has become more proactive in the past year or so. It is not leaving any stone unturned.”

However, he added that the HMRC would need to be “reasonable in their approach as there can be a number of reasons for these types of discrepancies, for example, if the property is shared.”

Anyone found to owe CGT could be facing significantly bigger bills than what they are currently paying on any property investments.

23/03/10