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Viva Espãna

Posted by Warr Co in Financial advice, Ian Spectre, Personal Accountancy | 0 comments

Ian Spectre suffered a bout of pneumonia in October and took an extended break in Spain to recuperate. He is now back in the UK and has just arrived at the Treasury to see James Fortescue-Simmonds to outline a new money grabbing idea!

Ian Spectre posting penalty notices in a postbox

 

Who is Ian Spectre? Find out here

Spectre knocks at the door. “Come in” says a loud voice “Ian, how are you? I heard you had been ill.”

“Yes James it was touch and go for a while…” Fortescue-Simmonds interrupted him “Yes, yes, I can see you’re alright now so what can I do for you?”

Spectre explained that while he was in Spain he came across many of his fellow countrymen who now lived in Spain. “There are about 300,000 Brits living in Spain alone, and about another 900,000 in the rest of the EU. Looking further afield, to include countries like Australia and the USA, about 3 million Brits live outside the UK.”

“So what are you getting at here Ian?” Fortescue-Simmonds asked. “We already looked at introducing a system of taxing Brits irrespective of where they live like they do in the USA, but the PM would have none of it.”

“Well,” said Spectre “two thirds of families living in the UK own their own homes. About half of those who emigrate initially keep their home and let it out. But every year about 10% of them sell up.”

“But so what” replied Fortescue-Simmonds “they fill in a self assessment tax return every year to declare their rental income and the capital gain when they do sell. What’s your point?”

Spectre smiled “We should introduce a form that must be completed within 30 days of the date a property in the UK is sold by any person outside the UK.”

“But who living outside the UK will know that they have to file such a return?” asked Fortescue-Simmonds. “They’re all used to making up returns to 5th April, surely most of them will miss this 30 day deadline won’t they?”

“Exactly” replied Spectre “and when they do miss the deadline we charge penalties. I reckon that there are about 150,000 homes sold each year by Brits living outside the UK and about 50,000 by citizens of other countries. If half of these returns are filed 6 months late the penalties will be £1,000 each, so something like £100 million a year!”

Fortescue-Simmonds sat at his desk mouth open wide but unable to speak immediately “Ian old chap that’s brilliant, the PM will love this when I tell her. I may even get an OBE!”

 

The NRCGT return is not fiction, it is real. It was introduced on 6th April 2015 and needs to be filed within 30 days when a property in the UK is sold by a non resident individual. Further, if that individual does not file self assessment returns they must also pay any tax due within 30 days of the sale. Even if the property was the individuals principle private residence and so exempt from capital gains tax the return must be filed.

A system of penalties was also introduced from 6th April 2015. There is an initial £100 penalty if the return is late, and if tax is paid late there is a penalty of £300 or, if greater 5% of the tax due after 6 months and the same again after 12 months. Originally daily penalties of £10 per day were charged where the return was between 3 and 6 months late. Daily penalties were dropped by HMRC following representations by professional bodies.

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