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Moore Kingston Smith : Important changes to the option to tax

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Did you know from 1st February 2023, HMRC will stop issuing option to tax notification receipt letters?

Instead, an automated response will be sent confirming the date when the notification was received. This should be kept by taxpayers for their records for at least 6 years.

HMRC will also no longer confirm the existence of an option to tax as it is the taxpayer’s responsibility to retain such information as part of business records. However, HMRC will respond if a request is made under the following conditions:

  • The effective opted date is likely to be over 6 years ago;
  • If you have been appointed as a Land and Property Act receiver, or an insolvency practitioner to administer the property in question.

Retaining evidence of any kind that an option to tax has been made over a property is important and the new rules should be noted by anyone with commercial property interests, not just those operating in the property sector.

New rules should be noted by anyone with commercial property interests.