Overseas property owners next on taxman's hitlist

INDIVIDUALS with overseas properties will be the first group targeted by the taxman’s new Affluent Unit, it has been announced.

HM Revenue & Customs said it will use “sophisticated data-mining techniques” on publicly available information to identify taxpayers with property abroad. HMRC will then highlight individuals “who do not appear able legitimately to afford the property” and those who are not declaring incomes and gains on the properties.

The establishment of the team was announced last month by chief secretary to the Treasury, Danny Alexander. It is focused on additional rate taxpayers who earn up to £20m. Other work planned involves commodity traders and people holding offshore accounts.

Exchequer secretary to the Treasury David Gauke ,said: “With HMRC’s increased capability and expertise, and its increasing success in tackling evasion both at home and offshore, the message is clear: there is no hiding place for tax cheats.”

Ronnie Ludwig, tax partner at Saffery Champness, said: “Those who have been letting out their foreign property and declaring the rents received have nothing to fear, but those who own foreign property which has never been let out should be prepared to prove to HMRC that they have received no income from the property. This will involve producing UK and foreign bank statements and being able to demonstrate that they could afford to purchase and maintain the property out of normal declared sources.”