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HMRC moves to close offshore mansion tax loophole
by Brian Cantwell on Oct 10, 2013 at 15:35
The HM Revenue & Customs (HMRC) has moved to clamp down on high-net-worth individuals who own mansions through offshore companies to avoid paying tax.
In April 2013 HMRC introduced an annual tax on ‘enveloped dwellings’ aimed at targeting companies that own high value residential properties.
Properties valued between £2 million and £5 million face paying around £15,000 under the tax.
HMRC has moved to target any schemes set up to avoid paying this charge, which will now come under the disclosure of tax avoidance schemes regime
Penalties for not disclosing a scheme to HMRC are up to £1 million and penalties for users failing to report the use of a scheme on a tax return are £100 for the first failure, £500 for the second and £1,000 for subsequent failures.
Chancellor George Osborne introduced the charge on 'enveloped dwellings' to raise money from people who are able to avoid stamp duty by conducting transactions through companies, rather than in their own names.
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