According to research from law firm Collyer Bristow, HM Revenue & Customs (HMRC) collected an additional £140 million from investigations into unpaid capital gains tax (CGT) over the last financial year.
Through analysing data from HMRC, the law firm calculated that £55 million of the figure came from investigations relating to ‘wealthy individuals’ and mid-sized businesses with the remaining £85 million stemming from regular taxpayers and small businesses.
Commenting on the findings, Partner James Badcock said: “The Revenue has kept the spotlight on CGT avoidance schemes, abuse and error over the last year. It has proved a fruitful area for enquiries and they are likely to continue in this vein. A continuous stream of high-profile tax avoidance cases in the media – including the Panama Papers scandal – means that pressure on HMRC to stamp out what it sees as abuses remains intense.”
Mr Badcock says that it is determining where and how much capital gains tax should be paid can be multifaceted and that "complications often arise when family members are involved".
“Increasingly, we are seeing cases where parents transfer property to their children, usually as part of a lifetime gifting strategy to ultimately reduce exposure to Inheritance Tax. These transfers can give rise to a chargeable gain and where this goes unreported, the Revenue is likely to investigate,” he adds.
A spokesperson for HMRC said, “The vast majority of people pay the tax they owe. As these figures clearly show those who try to get around the rules are always challenged by our specialist tax collectors, to ensure that they pay the correct amount of tax due.”
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