HMRC cancels daily penalties for Non-Resident Capital Gains Tax (NRCGT) Returns.
From 6 April 2015, non-UK residents have been obliged to pay NRCGT on disposals of UK residential property.
Unless the disposal is at nil gain/nil loss or you have granted a lease at nil premium at arm'sl length, all taxpayers have 30 days to return with HMRC following a UK property sale.
Late filing penalties apply under Schedule 55 of FA 2009.
Key problem with this new regime appears to be that:
- Many in the legal profession and letting industry are unaware of the measure and are not advising their clients.
- Many overseas taxpayers live overseas and are either ignorant of this comparatively new law or are uncontactable by HMRC.
According to the Chartered Institute of Taxation it seems that that HMRC has changed its mind about daily penalties following representations by taxpayers. It also says that it will withdraw those already issued.
It should be noted that the legal position is unchanged; HMRC is choosing not to levy the penalties, but it retains the right to do so.
The problem of educating overseas UK property owners in changes to the UK tax code will be compounded if HMRC decides to introduce Making Tax Digital for unincorporated landlords.
Links to our guides
- Non-resident capital gains tax
- Penalties: late filing
- How to appeal a tax penalty
- The Adviser's penalty planner (which penalty applies for which tax and when)
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