In Lauren Murdock v HMRC [2018] TC6600 a non resident failed to report the disposal of her UK property, she claimed ignorance of the law however evidence was scant and the appeal did not succeed. It seems that HMRC calculated her penalties incorrectly.

  • The taxpayer was resident in Australia
  • She sold a UK property and seems to have made a loss on disposal
  • She was unaware of the new 30 day reporting obligation for Non-Resident Capital Gains Tax and filed her NRCGT return late and received £700 of Late Filing penalties.
  • She appealed against the assessment claiming that she had a Reasonable Excuse for his failure: she was genuinely unaware that she was non-compliant and that she had been a compliant tax payer regarding her property income both as a UK resistant and non-UK resident taxpayer

Judge Amanda Brown found

  • There are conflicting judgments [from other tribunal judges] on whether ignorance of the introduction of section 12ZB TMA can, or in any particular circumstance does, constitute a reasonable excuse
  • There was scant evidence in this case, such evidence being limited only to a single letter and an email from the Appellant. [This seems to have made any decision about whether the taxpayer acted reasonably very difficult for the judge.]

The appeal was dismissed

Comment

Whilst we cannot be sure, as the details are scant, if the taxpayer made a loss then appears in this case that HMRC has miscalculated the schedule 55 tax geared penalties and therefore the fine should have been £100. See Grounds for appeal: HMRC error

It's advisable to get someone to check your penalties as the legislation is more complicated that it should be.

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 links

Lauren Murdock Judge Amanda Brown [2018] TC6600

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