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August 31, 2018

UPDATE: Taxpayers Victorious in NRCGT Late-Filing Case

In our previous blog NRCGT & Ignorance of the Law – Where are we now? (2 July 2018), we set out a series of cases where various judges came to differing conclusions over whether ignorance of the law was a reasonable excuse for failing to file a Non-Resident Capital Gains Tax (“NRCGT”) return on the disposal of UK property by the due date.

(Further information regarding the requirements of non-UK residents on selling UK residential property can be found here).

Since the publication of our last blog, Judge Thomas has ruled on a further case and reinforced his position that ignorance of the law can be a reasonable excuse for failure to submit a NRCGT return, thereby allowing a taxpayer’s appeal against HMRC’s penalty.

In Alison Bradshaw & Richard Bradshaw v HMRC (2018), the non-resident taxpayers had disposed of UK property and failed to complete the NRCGT return within the 30-day deadline.

Alison and Richard both claimed that they were unaware of the requirement to file the return, and that this was a reasonable excuse for failing to comply with the legislation.

In support of their position, they noted that the solicitor handling the conveyancing was unaware of the requirement and data published by HMRC showed that 36% of NRCGT filings were late, suggesting that the new laws were insufficiently publicised.

HMRC disagreed, and contended that ignorance of the law is not a reasonable excuse.

In reaching his conclusion, Judge Thomas once again cited Perrin v HMRC (2018) in that ignorance of the law can be a reasonable excuse for failing to comply with the law, and pointed towards his judgement in previous cases heard by him, namely McGreevy v HMRC (2017) and Scowcroft v HMRC (2018).

Related Articles

NRCGT & Ignorance Of The Law - Where Are We Now? (02 July 2018)

Non-UK Residence Landlords (Case Study)

New Rulings Cast Doubt on NRCGT Penalties (11 January 2018)

Penalties for Late Filing of NRCGT Return Cancelled (16 October 2017)


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