Uk Capital Gains Tax

[monkeytunes]

A good friend of mine had a couple of properties in the Uk, one he used himself the other for renting out, hes recently sold both houses so he could fund his move to Thailand. When I asked him about how much tax he had to pay on the rental house, he said nothing, im not going to tell them. I said to him im sure they will find out. But hes convinced they wont. Im concerned he will get caught out so want to get a bit of info before he get in too deep.Has anyone any experience of this, or known anyone do the same, did the tax office find out and how , what happended when they did find out?

Edited October 10, 2007 by monkeytunes

[siam-i-am]

A good friend of mine had a couple of properties in the Uk, one he used himself the other for renting out, hes recently sold both houses so he could fund his move to Thailand. When I asked him about how much tax he had to pay on the rental house, he said nothing, im not going to tell them. I said to him im sure they will find out. But hes convinced they wont. Im concerned he will get caught out so want to get a bit of info before he get in too deep.Has anyone any experience of this, or known anyone do the same, did the tax office find out and how , what happended when they did find out?

If he paid tax on the rental income they will get him, if he didn't chances are high he will get away with it.

[Acquiesce]

Could get away with it, could get caught.

One thing is for certain though, if caught he will recieve a prison sentance not just a fine.

[Prakanong]

I know a guy who sold a house that he had used for multiple occupancy - he owed a whack on CGT but had his lawyer transfer the money out of the country when he received it.

I know he goes back to the UK each year but on a different passport and has never been caught.

The strange thing is there has been no contact from the tax man etc either at any of his contacts??

[game4shame]

HMRC are forever running compliance projects of varying criteria.

if 'your good friend' (sure it's not you? ) is caught out then interest would be payable and, depending on the nature of the offence, penalties etc could be included.

worst case scenario would be legal action.

he could get lucky and get away with it.

but he could also get caught. if he's going around shooting his mouth off about dodging the taxman, there's always the chance someone will submit an allegation to HMRC.

[GuestHouse]

This comes under the general heading - Buring One's Bridges.

He's running the risk of getting 'detected' and 'convicted in abstentia'

If that happens he will have cut himself off from the UK - Now I know how in a moment of rash hubris that often comes with having just moved to Thailand, many guys like to proclaim they are never setting foot in the UK - well things change.

Not being able to go back to a place where you have a friends, free medical care, absolute rights to abode and all the legal protections that come with citizenship seems a high price to pay for getting away with not paying your taxes.

As for the chances of getting caught, I have a good friend who is a tax inspector, he tells me a significant number of people who they catch for tax evasion come to the tax man's notice via the generous assistance of family and friends.

Edited October 11, 2007 by GuestHouse

[Acquiesce]

I believe game4shame works for HMRC though i may me be wrong.

[mikethevigoman]

A good friend of mine had a couple of properties in the Uk, one he used himself the other for renting out, hes recently sold both houses so he could fund his move to Thailand. When I asked him about how much tax he had to pay on the rental house, he said nothing, im not going to tell them. I said to him im sure they will find out. But hes convinced they wont. Im concerned he will get caught out so want to get a bit of info before he get in too deep.Has anyone any experience of this, or known anyone do the same, did the tax office find out and how , what happended when they did find out?

Who made that song , go on ,take the money and run ?

[game4shame]

I believe game4shame works for HMRC though i may me be wrong.

guilty.

[monkeytunes]

HMRC are forever running compliance projects of varying criteria.

if 'your good friend' (sure it's not you? ) is caught out then interest would be payable and, depending on the nature of the offence, penalties etc could be included.

worst case scenario would be legal action.

he could get lucky and get away with it.

but he could also get caught. if he's going around shooting his mouth off about dodging the taxman, there's always the chance someone will submit an allegation to HMRC.

Hi game4shame, I could be so lucky, I was only able to afford a little tiny house of my own, I wish I was lucky enough to have been able to afford a second house but hey never mind. Could I ask, how would the HMRC be able to find out that hes got a second house, from what my mates told me is that hes always rented and never claim the income for tax?

[TBWG]

Hi

I also own properties in the UK and it hurts to have to pay CGT and it had crossed my mind that I should sell and not declare it.

However upon discussing this with a very good friend who worked for the revenue (although he was no great lover of them as an employer and has since taken early retirement and emigrated).

His advice to me was that the revenue computer systems left a lot to be desired, but the 1 govt computer system in the UK that is almost 100% perfect is the land registry, (after all everyone registers their largest asset) and the revenue use this database.

To quote him he said as sure as night follows day it is only a matter of time before they catch up with you, it may take a long time but it will happen.

My accountants also advise me that they are legally obliged to advise the revenue if they think you have sold a property. i.e if you income stream suddenly dries up and you have not declared the sale for CGT.

Hope this helps.

Now I have a question,

Darling, has just reduced CGT to 18% and scrapped taper relief. Does this mean that if a property was bought for 100k many years ago and is now worth say 200k that this increased figure at day zero i.e when new rules become effective is the new starting point for calculations?

If so perhaps the OP friend does not have such a great liability after taking into account his personal allowance. Especially if sold in different tax years.

TBWG

PS Just re read post see properties already sold!

Edited October 11, 2007 by TBWG

[game4shame]

Hi game4shame, I could be so lucky, I was only able to afford a little tiny house of my own, I wish I was lucky enough to have been able to afford a second house but hey never mind. Could I ask, how would the HMRC be able to find out that hes got a second house, from what my mates told me is that hes always rented and never claim the income for tax?

PM sent.

[monkeytunes]

Hi game4shame, I could be so lucky, I was only able to afford a little tiny house of my own, I wish I was lucky enough to have been able to afford a second house but hey never mind. Could I ask, how would the HMRC be able to find out that hes got a second house, from what my mates told me is that hes always rented and never claim the income for tax?

PM sent.

Thanks Game, PM sent