Buy-to-let landlords who sold up to take advantage of the recent ‘mini-boom’ could face huge tax penalties.
It is feared that many will be caught out by a recent, and little-known capital gains change.
Since April, UK residents who sell or gift UK residential property and make a taxable gain are required to report and pay any CGT owed within 30 days of completing the transaction. Before this they had up to 22 months to do so.
Late filing attracts an initial £100 penalty. After three months, there are additional daily penalties of £10, up to a maximum £900. After six months, there is a further penalty of 5% of the tax due or £300, whichever is greater. After 12 months, another 5% or £300 charge applies, whichever is greater. Meanwhile, for late payment individuals receive a fine of 5%t of the tax unpaid at 30 days, six months and 12 months