Nobody enjoys paying taxes but, sadly, there are only two things that are certain in life: death and taxes. Capital Gains Tax is payable upon the sale of a rental property, but a Hampshire landlord thought he was above the law. Unfortunately for him, he was wrong.
The landlord sold two rental properties between 2006 and 2013, generating a significant capital gain. The rise in the value of the two properties triggered a Capital Gains Tax bill of more than £157,000, which should have been paid over to HMRC.
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Because no money was paid, HMRC investigated and arrested the landlord when he returned to the UK in 2014, following a trip abroad. He was jailed this month and will now be subject to asset forfeiture proceedings, where HMRC seek to claw back some of the tax money owed.
HMRC was unequivocal in their response to the media following the sentencing of the landlord: “It is simply not acceptable to steal from UK taxpayers. HMRC will continue to pursue those who attempt to hide their gains on assets and income, and investigate those who attack the tax system.”
Special HMRC Taskforce
This investigation is not the first to target landlords suspected of evading Capital Gains Tax. Since a special HMRC taskforce was created, a number of landlords have been prosecuted for tax evasion. HMRC is able to cross-check data from the Land Registry and electoral roll to identify landlords who underpay or fail to pay, so avoiding payment is not an option.