WEALTHY UK residents with foreign property will come under increased pressure to make sure their tax returns are in order, after Her Majesty’s Revenue and Customs launched a crackdown on undeclared assets.
HMRC said yesterday that a new team of investigators will target around 200,000 so-called affluent taxpayers, some of whom it believes may be making an undeclared profit on second homes or land abroad.
The move comes on the back of recent tax treaties that the UK has brokered with countries including Switzerland and Lichtenstein to allow record sharing, as well as new information obtained by HMRC from banks and other sources of financial data.
Estate agent Savills estimates that almost half a million UK residents own a property abroad, though not all of these will fall under the government’s definition of affluent.
The new category is likely to hit many of those paying the 50p tax rate, and will catch far more people than the high net worth unit set up by HMRC in 2009, which only focused on those earning more than £20m. It will not apply to non-doms, who legitimately pay a flat fee to the taxman to exempt them from declaring overseas assets.
“HMRC wants to shake the tree and dislodge a few big apples, to encourage others avoiding tax into voluntary disclosure,” Grant Thornton tax director Mike Warburton told City A.M. “I wouldn’t be surprised if they pursue criminal cases to make an example of one or two high-profile names.”