In Eric Scowcroft v HMRC [2018] TC6527 a New Zealander's appeal against late filing penalties in respect of a Non Resident Capital Gains tax return was successful. He was unaware of the new filing requirement and his conveyancing solicitor did not point it out.

He claimed to have a reasonable excuse for his admitted failure:

(1) That he expected his solicitor handling the sale to deal with any relevant tax obligations or at least to inform him of them.

(2) That he could not be expected to know of the new requirements to make a NRCGT return, and that his actions, or non-actions, were those of the reasonable person acting in the way HMRC say such a person should.

Judge Thomas found that:

The appeal was allowed.

Comment

Under Schedule 55 FA 2009 penalties applied under paragraphs 3, 5 and 6. The judge noted that HMRC only charged penalties under paragraph 3 and made some thoughts as to whether HMRC had the power to do so.

Links to our practical guides

How to Appeal a Tax Penalty

Penalties: Late filing

Grounds for Appeal: Reasonable Excuse

Non-Resident CGT: UK residential property

The Non-Residents' Tax Toolkit

Non-Resident Landlords Scheme

External link

Eric Scowcroft v HMRC [2018] TC6527