When you sell residential property in the UK or abroad, there may be Capital Gains Tax to pay.
However, by the sounds of it, the property used to be your only home. You don’t usually have to pay Capital Gains Tax when you sell your own home.
But the flat stopped becoming your home when you moved into your marital home. Therefore, some of the profits from the flat may be subject to Capital Gains Tax.
As the sale happened a few years ago, I would encourage you to make use of HMRC’s Property Sales Campaign. This allows taxpayers the opportunity to come forward and disclose the sales of second homes- in exchange for the best possible terms from HMRC. The disclosure and settlement of any tax liabilities must be complete by 6th September 2013 though- so you don’t have long.
Soon after the Campaign closes, HMRC will use their extensive powers to identify those who have failed to come forward. The penalties they face will be more severe and HMRC may even pursue a criminal investigation in some cases. So the advice would always be to come forward first; don’t wait for HMRC to find you.
Your local TaxAssist Accountant would be happy to get your affairs up to date and liaise with HMRC on your behalf if you think the Campaign is right for you. Please contact us to be put in touch with your local office.
By Jo Nockels
Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.