In Welland v HMRC [2017] TC06265 the First Tier Tribunal (FTT) found that the taxpayer’s ignorance of the new rules for Non-Resident Capital Gains Tax (NRCGT) was not a reasonable excuse for the late filing of his NRCGT returns. The penalties were upheld, but special relief was granted.

Since 6 April 2015, disposals of UK residential property by non-UK residents have been subject to  Non-Resident Capital Gains Tax. A return must be filed within 30 days of the disposal.

Mr Welland sold three properties in the year, he failed to report the, and so had three sets of late filing penalties.

He argued that the he had a Reasonable Excuse for not being aware of the need to file the NRCGT returns. In line with the McGreevy decision: there was a lack of publicity of the new rules and he was unaware of the change in the law.


The FTT noted ignorance of the law is not a reasonable excuse and considered that HMRC has no obligation to individually notify affected persons, even where they could reasonably anticipate this (such as Non-Resident Landlords).

The FTT’s opinion was that a reasonable person would have looked into their reporting obligations upon making a disposal and if HMRC’s guidance was unclear contact them for clarification.

The FTT did agree special circumstances applied. The taxpayer had no opportunity to learn and correct his position between the first default and penalties being raised, so only the penalties on the first NRCGT Return were allowed to stand. However, the penalties were not disproportionate.


The FTT has now heard four cases where the taxpayer has argued that ignorance of the law was a reasonable excuse for the late filing of a NRCGT Return. The first two, Rachel McGreevy and Patsy-Anne Saunders, were decided in favour of the taxpayer, in contrast to the above. We consider the reasons for this distinction in our guide to Non-Resident CGT: UK residential property.

For the interested reader, Mr Welland made a Freedom of Information request of HMRC that showed some third of NRCGT Returns were submitted late and HMRC had either not charged or withdrawn penalties in over a third of these cases. The aggregate penalties were almost half the total value of tax at stake.

As the taxpayer lived in Thailand, the Judge suggested the appeal be determined on the papers, rather than having the parties present arguments in person. 


Welland v HMRC [2017] TC06265

Non-Resident CGT: UK residential property

Rachel McGreevy v HMRC [2017] TC06109

Patsy-Anne Saunders v HMRC [2017] TC06173

Hesketh v HMRC [2017] TC06266

How to Appeal a Tax Penalty

Penalties: Late filing

Grounds for Appeal: Reasonable Excuse

Non-Resident Landlords

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