HMRC clarifies process for paying unpaid tax for deceased landlords

HMRC has updated its Let Property Campaign Service, which allows landlords to disclose and settle any unpaid tax bills, to include information on how to make a disclosure on behalf of someone who has died

HMRC’s Let Property Campaign is aimed at landlords who owe tax through letting out residential property, in the UK or abroad and allows them to get up to date with their tax affairs and take advantage of the best terms.

After landlords make a disclosure to HMRC they have 90 days to calculate and pay any tax owed.

The personal representative or executor of an individual who has passed away can make a disclosure through the digital disclosure service (DDS), but it must be made clear that the disclosure being made is on someone else’s behalf. HMRC may also ask for evidence to show that the individual is allowed to act on behalf of the deceased.

To take part in the Let Property Campaign individuals should:

  • tell HMRC they want to take part in the Let Property Campaign (Notify)
  • tell HMRC about all income, gains, tax and duties (Disclose)
  • make a formal offer
  • pay what any tax owed

Individuals who provide useful and accurate information to HMRC may also benefit from reduced penalties offer.

To calculate how much tax is owed, landlords will first need to work out the total rental income for each year they have previously failed to tell HMRC about. They will also need to calculate the allowable expenses that incurred on that rental income.

These allowable expenses will have to be deducted from the landlords income to determine the taxable profit.

Report by Amy Austin

Amy Austin |Reporter, Accountancy Daily [2016-2019]

Amy Austin was reporter, Accountancy Daily and Accountancy magazine, published by ...

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