By Shane McGinley
Move comes ahead of a September deadline for those who have sold assets and not paid dues
The UK is ramping efforts to crackdown on expats who own property in Britain but have not paid tax on their buy-to-let properties or have sold homes and not paid duty owed to the treasury.
“Expats who own rental property back in the UK, or who recently sold a second property here, are being warned to get up-to-date with their tax liabilities or face the possibility of heavy consequences”, said Richard Way, Editor at The Overseas Guides Company.
“The UK Tax Office is ramping up efforts to sniff out private landlords who evade tax due on rental income or from the sale of a buy-to-let property,” he added.
Since 2011, British tax officials have launched 40 specialist taskforces to target overseas tax dodgers in the buy-to-let sector. In Yorkshire alone this has led to 12 cases of landlords being criminally investigated. Meanwhile, the South East taskforce, launched in November 2012, expects to recover £4m ($6m) in unpaid tax. Recent reports show that an increasing number of new developments in London are bought by expats wanting the security of a buy-to-let back in the UK.
Expats who own properties in the UK have until September 6 to get their tax affairs in order as Her Majesty’s Revenue & Customs (HMRC) has launched it’s ‘Property Sales Campaign’ in which investors can voluntarily disclose and pay any unpaid tax resulting from the sale of a second home. Once this deadline passes, tax experts expect an aggressive attack on undeclared rental income, experts warn.
“It’s not surprising that HMRC now sees private landlords, wherever they might live in the world, as a major source of tax revenue,” Way added. “There is concern that many expat landlords might not fully comprehend their tax reporting obligations in the UK. The best advice right now for an expat landlord who is unsure of their tax affairs is to seek advice from a tax advisor.”
They might also want to consider how many UK resident tax payers own property abroad and fail to declare the rents they are receiving on those properties.
My previous Irish landlord of a JBR apartment used to like being paid in cash..........say no more.
The UK tax authorities would be equally successful by sending an investigative team to Dubai and weeding out the non-declarers!