Sound advice over tax implications

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The taxman has started targeting people believed to have sold a property without declaring a gain, according to Sheffield accountancy firm Barber Harrison & Platt.

HM Revenue and Customs has started sending letters offering individuals an opportunity to come forward and reduce penalties on any underpaid tax.

BHP says it is unclear what information HM Revenue and Customs is using to target taxpayers, but it could be using Land Registry or Stamp Duty Land Tax returns.

The accountants say individuals should not be alarmed if they receive a letter as it is common for gains on second homes to be exempt under principal private residence relief or other tax reliefs and, if that is the case, taxpayers are under no obligation to report the sale to HMRC.

However, anyone who has disposed of a holiday home, investment property or inherited property should act now.

BHP head of personal tax Elaine Skelton said: “At the risk of sounding clichéd, keep calm and speak to your tax advisor.

“Our experience suggests that the majority of individuals receiving these letters have done nothing wrong at all, but it is extremely important to take advice if you are in any doubt.”