HMRC to scrutinise wealthy overseas property owners, warns accountants James Cowper
As part of the Government’s drive to tackle tax evasion and avoidance, a new HM Revenue and Customs (HMRC) unit is to use sophisticated "data mining" technology to identify and clamp down on people who own property or land overseas who it believes owes unpaid tax.
The Government has created a dedicated team of 200 tax investigators who will target wealthy UK tax payers.
Stephen Barratt, private client director at James Cowper comments: “Those who own property overseas, such as a villa in Spain or a second home in France, will come under scrutiny.”
The taxman’s team, which will focus solely on those who are in the 50% top tax rate, is expected to scrutinise advertisements on the internet and in magazines. They will also use sophisticated tools to identify where people appear either not to be able to afford a property or are not declaring the right amount of income or gains from it.
Stephen added: “It is alarming that HM Revenue and Customs seem to be saying that those with overseas property are tax cheats. If speculative enquiries are raised owners are going to be put to what might be a considerable amount of trouble, and expense, just to prove their innocence. This could particularly be the case where the property has not been rented out so there has been no requirement to maintain records of expenditure. This cannot be right even in these times of austerity.
“If an owner receives an enquiry, professional guidance should be sought so that matters are dealt with in the best possible way.”
Stephen Barratt, Director, James Cowper LLP, Tel +44 (0)1635 35255 or email sbarratt@jamescowper.co.uk
01.11.11