This is a freeview 'At a glance' guide to Non-resident CGT return penalty appeals.

Is ignorance of the change in the law for the Non-Resident Capital Gains Tax return a valid excuse for late filing the return, or can you claim reliance on an adviser, even where they are a tax expert?

At a glance

Judges in the First Tier Tribunal have been taking differing views on this matter.

What we know:

• The new rules were not well publicised.
• Many conveyancing lawyers seem to have been unaware of the changes, however, conveyancers are not tax experts.

The uncertainties

• It is not easy to say whether the Non-Resident Capital Gains Tax (NRCGT) regime is so especially complex that it requires taxpayers to obtain expert advice and assistance: it rather depends on the individual taxpayer.
• If it is not complex then why were so many conveyancing lawyers unaware of the new 30-day (60 days from 27 October 2021) filing deadline?
• Should you rely on a property lawyer/conveyancer for basic tax advice, after all, they do advise on Stamp Duty Land Tax?
• If the rules are not complex then why would you need to rely on an adviser?
• If the rules are not complex then would you not suppose that you simply report your gains under normal Self Assessment?
• Are the rules so complex that all non-residents should engage tax specialists?

 

Case	Judge	Appeal allowed	Reasonable excuse claimed		Other factors
			Ignorance of the law	Reliance on adviser	Or, Special circumstances
Rachel McGreevy	Thomas	Yes	Claimed and accepted	No claimed	There were special circumstances because the gain was fully exempt under PRR and the taxpayer filed a self assessment return in which she expected to be able to declare the gain
Patsy-Anne Saunders	Connell	Yes	Claimed and accepted		She was in Self Assessment and any person making a capital loss would normally expect to report and pay any CGT under Self Assessment
Robert Clive Welland	Mosedale	Penalty reduced	Claimed but not accepted	Not claimed: however solicitor did not mention it	Penalties for 3 Returns: taxpayer unable to learn from his mistakes so penalties were reduced
David Hesketh Jennifer Hesketh	Mosedale	No	Claimed but not accepted	Not claimed: Solicitor did not mention it
Alan Jackson	Shepherd	Yes, in part	Claimed but not accepted	Not claimed	Penalties for 2 Returns: taxpayer unable to learn from his mistakes so penalties were reduced. Penalties were miscalculated by HMRC so reduced further
Raymond Hart	Brannan	Yes		Reliance on adviser
Steven Harrop	Scott	No	Not accepted  as an excuse
Mei Chung Wong	Scott	No	Not accepted  as an excuse
John Nugent	Scott	No	Not accepted as an excuse
Timothy Cobb & Caroline Wenn	Scott	No	Not accepted as an excuse
Eric Scowcroft	Thomas	Yes	Yes, accepted: not well publicised by HMRC	Yes: conveyancer/Solicitor did not mention it
Alison Bradshaw Richard Bradshaw	Thomas	Yes	Yes, not well publicised by HMRC	Yes: conveyancer/Solicitor did not mention it. Agent Update 51 which HMRC had referred to was issued 5 months after the conveyancing date
Nigel Pitcock & Karen Pitcock	Scott	No	No, non residents should check the law	Conveyancer/Solicitor did not mention it
Lauren Murdock	Brown	No	No, non residents should check the law		Para 17 cap apparently not considered
Ann Rowan-Smith	Beare	Yes	Claimed and accepted:		agreed a genuine error, thought gains reported under normal SA rules
Barry Gilbert	Hellier	No	Claimed not accepted as no evidence of trying to find out the law: non residents should check the law

 

Useful guides on this topic

How to Appeal a Tax Penalty
What are the steps in making an appeal? What should your appeal cover? What does recent case law say on this topic?

Penalties: Late filing
Late returns can be subject to a mix of fixed and tax geared penalties. What penalties apply for late filing? Which penalty will apply and when? 

Grounds for Appeal: Reasonable Excuse
What is considered to be a 'reasonable excuse' when a taxpayer makes an appeal against a tax compliance failure?

Non-Resident CGT: UK residential property
Capital Gains Tax, non-residents and UK property.

Non-Resident Tax Toolkit
This toolkit covers the key UK tax issues for non-UK resident individuals holding UK assets and property and working in the UK.

Non-Resident Landlords Scheme
What is the Non-Resident Landlord scheme? How does it work? Who does it apply to?

External links

All the cases above have links through the individual write up.

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