OVERSEAS PROPERTY OWNERS TARGETED BY UK TAX MAN, HMRC

[annanirvanna]

Dear Kibkomers - thought the bulletin I got from an expat newletter that I subscribe to may be of interest to my friends on KibKom. Sorry it's more doom & gloom news - but I felt sharing this better than keeping it to myself. Probably won't affect many of you, but.... you now know the latest twist of the knife by HMRC

Overseas property owners are warned to be on their guard against increased scrutiny of their tax returns for under declared rent.

Accountancy group UHY Hacker Young revealed HM Revenue & Customs garnered 64% more money from investigating personal tax returns last year than in the previous 12 months.

Revenue was up from £268 million to £440 million – and much was raised from property owners with second homes overseas.

The firm warns HMRC has turned their inquiry focus on raising revenues from capital gains tax from selling second homes and buy to let property.

Bank accounts are also looked at more closely to try to detect undeclared property income.

Holiday let crackdown
HMRC also has a sophisticated online team looking at relationships between holiday property web sites and taxpayers.

Roy Maugham, tax partner at UHY Hacker Young said: “HMRC is trying to raise revenue across the board by undertaking increasingly painstaking investigations. They are now pursuing smaller infractions.”

“Previously, HMRC resources and manpower were only really used to chase larger amounts of money, but now a forensic approach is being used even for when it is just a modest amount of tax that is missing.”

“HMRC is also putting a lot of effort into double checking the amount of capital gains tax that business owners should pay on selling their businesses, as they know it is an area where they can pick up big slugs of extra money.”

“Calculating capital gains tax can be confusing, and people often make mistakes when they file their returns. Because the lump sums involved are higher than for many other forms of taxations, HMRC can ratchet up its returns quickly if it uncovers a mistake.”

Spurned partners paid for tax tips
One source that is giving HMRC a rich vein of information about personal tax returns is apparently spurned partners who are increasingly tipping off the tax man about the financial affairs of their partners.

Law firm Reynolds Porter Chamberlain has researched rewards paid by HMRC to informants have risen by 20% in the past year to almost £375,000.

Adam Craggs, tax partner at the law firm Reynolds Porter Chamberlain, said: “If the divorce is acrimonious, it is not uncommon for a spouse to turn HMRC informant. HMRC is under intense pressure to increase the tax yield for the Exchequer.

“They are increasingly resorting to unorthodox methods to get the job done, such as paying informers for tips.”

The firm claims estranged partners threaten to report their spouses as leverage to gain a larger share of a divorce settlement.

[Soner]

[Deniz1]

Well we dont exist so there!

[Marions]

thanks Anna. If you hadn't posted this, then I would. Very interestinginfo.
Interesting that our beloved Boss is remaining silent over this one.

[annanirvanna]

Cheers angel

[Briannu]

A very good friend of mine recently had a yearly chat with HSBC in Cambridge about her investments and was told they were aware that she had a substantial sum in their Girne branch and had she declared it to HRMC. When she said she had not they advised her to do it sooner rather than later.
So glad my savings are with Credit West.

[andrew4232]

A very good friend of mine recently had a yearly chat with HSBC in Cambridge about her investments and was told they were aware that she had a substantial sum in their Girne branch and had she declared it to HRMC. When she said she had not they advised her to do it sooner rather than later.
So glad my savings are with Credit West.

you would have thought that was in breech of the rules as HSBC TURKEY claim to a separate company to HSBC UK passing that info

[cyprusishome]

HSBC TR is part of HSBC Holdings and info is shared, always has been.

The issue of briannu is to do with Offshore Banking which is clamped down hard on. For us poor people trying to earn a few extra pennies we always get caught where the big fish who move their cash to all sorts of weird countries get away with it. All our cash is here so have no issue with UK tax issues however if you live in UK and take interest in a foreign bank account or income from property lets you could land yourself in deep brown if you do not know the rules.

Obviously interest here is taxed at source so it is legal in TRNC but not sure what the UK tax man says, best to go on line and check it out. As for rent, if tax is paid here then there should not be any issue if you put the money into a TRNC account. Problem is people who collect their rent direct in UK you could be in trouble from both lots of tax authorities. It is not just UK Taxman the TRNC tax man wants you as well and they are getting very strict. Best policy, stay within the law!!!