In Shu Fang Yang v Revenue Scotland , the First Tier Tribunal (FTT) for Scotland Tax Chamber held that ignorance of the law is not a reasonable excuse for late submission of the three-year LBTT Lease Review Return (LBTT return).
- On 9 September 2016, Shu Fang Yang acquired airport car parking spaces on a lease as an investment and submitted an LBTT return in respect of car parking spaces on 9 September 2016, 38 days late.
- Revenue Scotland sent a reminder to submit the three-year LBTT return in August 2019, including a reminder of the due date for return and an outline of penalties.
- The LBTT return was submitted on 8 November 2019 and Revenue Scotland issued a penalty on 30 October 2019.
- Shu Fang Yang chose to Appeal directly to the Tribunal, rather than to Revenue Scotland or seeking a review of the decision to impose the penalty.
- Her grounds for appeal were that she had a Reasonable excuse for late filing: she was unfamiliar with the requirements of Scots law.
The FTT Scotland considered:
- Whether Revenue Scotland had correctly imposed the penalty at the correct amount in respect of the LBTT return.
- As Revenue Scotland had no grounds to justify a reduction in the penalty, the burden of proof turned to Shu Fang Yang.
- It had to be decided whether being unaware of Scots law and the difficulties with the investment scheme which gave rise to the LBTT return reporting requirement, constituted a reasonable excuse or special circumstances.
The FTT found:
- No evidence was provided to demonstrate steps taken to ensure that the LBTT return was filed on time: a reasonable taxpayer should at the very least be expected to take reasonable steps to ascertain what are his or her tax obligations.
- It was for Shu Fang Yang to ascertain the relevant legal requirements and to comply with them.
- Shu Fang Yang did not demonstrate the actions of a responsible attitude to her duties as a taxpayer.
- The appeal against the penalty of £100 was dismissed.
Land and Buildings Transaction Tax
Land and Buildings Transaction Tax (LBTT) is a tax on transactions in land situated in Scotland. It replaced Stamp Duty Land Tax (SDLT) on 1 April 2015.
Scottish LBTT Rates
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How to appeal a tax penalty
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Grounds for appeal toolkit
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