The “Let Property Campaign” – Launched September 2013

HMRC are firmly of the belief that many of the estimated 1.5M landlords are underpaying tax, the shortfall estimated at £500M each year.

HMRC have gathered information from a wide range of sources and will run this campaign for a period expected to be around 18mths. Again making a voluntary disclosure rather than waiting for HMRC to contact you will mean that any penalties charged will be at a lower rate.

In addition to non disclosure of rental property income there are a significant number of landlords owning properties in joint names who have been declaring income perhaps all to one of the joint owners rather than 50/50. This is particularly common where the joint owners are married and one party to the marriage is liable to higher rates of tax and the other has little or no other taxable income. There has been a mistaken relief that splitting income all to one of the joint owners is permissible but a recent first tier tribunal case has confirmed that rental profits can only be split unequally between spouses where the actual beneficial ownership of the properties is unequal.

If you own rental properties and have any concerns about how income should be reported please contact a member of our tax team.

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