Capital Gains Tax

[Scaramanga]

Just had a call out of the blue from my mother’s cousin. He was trying to pick my brains about taxation law.

This is not my area of expertise.

He is worried because in July 1996 he sold his late mother’s house but did not realise the sale was liable to Capital Gains Tax. He said he was unaware of such a thing and now he’s concerned that not only is he liable to pay CGT but that he will also be liable for 26 years’ worth of penalties, assuming such things apply.

I have told him to contact his local CAB to see if they might be able to advise him. In the meantime I said I would seek advice online.

If he were to fess up to HMRC now what are the likely financial and legal repercussions?

[Sam101]

There would be a personal capital gains allowance before any tax was due. However, without knowing the circumstances of the sale it is difficult to guide anyone. When the house was sold, in what position was he acting? Why does he think the sale was subject to capital gains tax, did the mother not live in the house? If she dies and he was acting as executor, then we need to know. More information would help