New HMRC team targets foreign property owners

A team of 200 investigators has been formed by HMRC, known as the Affluent Team, to focus on ‘wealthy tax cheats with overseas property’.

Charged with identifying individuals who are either property or landowners abroad, the newly-formed team established and announced by HMRC will be using ‘new and innovative risk assessment techniques’ and ‘sophisticated data mining techniques’ (such as a computer program which can scan publicly-available, overseas property listings to identify British owners) to investigate property and land purchases overseas, and the funding and taxation thereof.

What the team will essentially be doing is determining where the money to buy the property came from, particularly if such a purchase is inconsistent with the financial records they hold for the purchaser; whether the property brings in any rental income; and whether any foreign bank accounts have been opened, which could hold undeclared income or capital gains from these properties.

Should the property have been inherited for example, it would need to have been listed as part of the benefactor’s estate, which would be subject to UK Inheritance Tax. And in the case of rental, anyone earning, but not declaring, an income on overseas property would be liable to tax in the UK, as would anyone who has made gains on the sale of an overseas property.

The long-term aim of the team is to increase the Treasury’s tax revenue, and to prevent tax evasion.

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