If you are one of the estimated 250,000 Britons now owning a property abroad, HM Revenue and Customs (HMRC) are on the lookout for you. They have announced that they will be taking a keener interest in the tax affairs of UK residents with properties abroad. They are concerned that there may be failures to fully value (or even declare) foreign-owned assets for Inheritance Tax (IHT) purposes.
According to HMRC, many owners of foreign property do not understand that assets situated abroad constitute part of their estate for UK IHT purposes. This can be the case even where the property owner lhas lived abroad for several years. HMRC believes that there are significant losses to the revenue .
HMRC have recently forced financial institutions to reveal the identites of holders of foreign bank accounts and it is thought that they may make use of their powers to obtain the information they need to identify owners of foreign properties.