Tax dodging landlords can now have their property seized

Posted: 6/1/2021

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Landlords who dodge tax by failing to declare income could have their properties seized under Unexplained Wealth Orders. One extreme example of this is a woman who spent more than £16 million at Harrods over 10 years and will have to give up her £15m home unless she reveals the source of her fortune under Anti-Money Laundering (AML) laws.

Zamira Hajiyeva, the wife of jailed Azerbaijani banker, Jahangir Hajiyev, lost her final appeal against a court order forcing her to reveal how she came by so much money.

The National Crime Agency (NCA) is now poised to seize £22m worth of property, including her home in Knightsbridge and an £11m property on a Berkshire golf course.

But the AML laws relate to those with smaller incomes not just extreme cases like this. And you don't need to be lavishly spending to come under HMRC's radar. Once you own a property you are on the record, and if you fail to declare income, HMRC can take a range of measures from civil penalties to prosecution. 

Recent unfair tax increases will likely cause more landlords to try and evade tax, but the risks are high. Landlords can still offset their expenses against income including repairs, maintenance, rates, insurance and letting and management fees, and finance interest can be re-claimed as a tax credit at a flat 20%. 

So in fact, despite Key One Property offering a saving of 20% on VAT (we do not charge VAT), you can actually save a further 20% on our fees in income tax. 

 

 

 

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