Frequently Asked Questions

FAQ Page

No. A gift of a UK residential property can be subject to capital gains tax unless it has always been your main residence. Stamp duty land tax can be payable if there is a mortgage outstanding which your child takes on as part of the gift. Furthermore, inheritance tax can also apply if the person making the gift dies within 7 years of making the gift.

Main residence relief is available to individuals who have occupied their properties as their main residence throughout. However, if you have a house with large gardens, rent the property to another for some of the time you own it, or use some of the house for business purposes, then the relief may be restricted.

Wills are not always drafted to give the best inheritance tax results. All wills do is to let the executors know what assets to distribute to which beneficiary. This is based on the estate AFTER paying the taxes due, which in this case could be at rates of up to 40%. It is common to leave assets to the surviving spouse, and this means all the family assets over the inheritance tax threshold will be heavily taxed. Planning can help reduce the estate to reduce this charge.

You should seek immediate professional help. Avoid responding to HMRC letters on your own as you may jeopardies your case. A simple enquiry may lead to another case being opened against you which will lead to more costs and/or penalties and interest charges.

HMRC will usually have some evidence of their claim so it is worth taking the accusation seriously. However, occasionally HMRC do get the enquiry wrong and clients can end up being penalised unfairly. We can assist you in ensuring that the claim by HMRC is legitimate and how we can deal with it in a professional manner.

When it comes to UK residential properties it is a criminal offence not to declare any earned income irrespective of the profit made. There are restrictions on mortgage costs which could mean you owe tax anyway. We can assist you with declaration of your residential properties (via Let Property Campaign) and agree a favorable outcome for you with HMRC. It is crucial you speak to us in the first instance.

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