NRCGT return

[etf]

rbk123,

Thank you very much for posting here about your wonderful success.

I would encourage anyone else affected by this debacle to let us know how they have been affected. I'd especially welcome posts from the 778 people who had their appeals accepted before HMRC appear to have shifted their own goal posts. With that evidence I think we would once again have a good case to blow HMRC's argument out of the water.

Only HMRC could continue to claim that they are treating taxpayers even handedly in the light of evidence suggesting they are unwilling to accept the truth.

KR

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And just to add to this farce another decision in favour of HMRC.

http://financeandtax.decisions.tribunals.gov.uk//judgmentfiles/j10478/TC06516.pdf

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I don't follow the comments below from the Wong case on a number of levels:

i) Did HMRC really publicise the changes widely? If they did, why are there so many legal advisers without a scooby doo of the new regime?

ii) Do legal advisers really have no obligation to flag the NRCGT filing requirement to their clients?


I note the argument that neither of the advisors were aware of the change in the
legislation. That is unfortunate. However, I agree with Judge Brannan in Hart at
paragraph 77 where he states:
“As regards the solicitor, I do not think that there is any evidence that Mr Hart had engaged the
solicitor to provide comprehensive tax advice in relation to the disposal of the Property. It is
10 usual for a solicitor to advise in relation to stamp duty land tax returns, but I think it would be
unusual for a conveyancing solicitor, unless explicitly instructed to do so, to advise more
broadly on tax issues. On this basis, I do not think there are any grounds for concluding that
Mr Hart could reasonably have been expected to receive advice from the solicitor in relation to
the need to file a NRCGT return”.
15 38. The same argument would apply to the sales agent. Their ignorance does not
amount to a reasonable excuse. HMRC did publicise the changes widely.

A contrary view is expressed a number of times on this thread.

[Lambs]

R,

Congratulations on your success. I have no doubt that the many people following this thread look forward to hearing more, in due course.

E, keep on keepin' on.

Best, all,

Lambs

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http://financeandtax.decisions.tribunals.gov.uk//judgmentfiles/j10487/TC06525.pdf

Not yet read it, but banner summary suggests this is another reliance on an adviser case.

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This thread said:

Before the McGreevy decision was announced, an outstanding technical expatriate tax practioner believed a very good case could be made for claiming reasonable excuse as follows:

The point is that thousands of people are getting penalised for just following the instructions, or lack of instructions, from their solicitor/conveyancer. If it were a few, you would suggest that the lawyers were at fault. As it is so many you have to say that the taxpayer themself is not at fault as the solicitor has not advised them, and the solicitor is not at fault as it clearly is not something widely known amongst solicitors and property conveyancers. Many of them clearly do of course, but the stats show how poorly this has been rolled out.

Judge Thomas said:

131. Because of paragraph 23(2)(b) Schedule 55 I must go on and consider whether
despite my finding that the appellant reasonably relied on a third party, the appellant
did not take reasonable care to avoid the failure. I am at a loss to see what the
appellant could have done to avoid the failure. What should he have asked the
30 solicitor? He would have known that he was selling what had been his principal
private residence for a loss so that even if he knew that non-residents had become
liable to CGT on residential property disposals after 5 April 2015, that does not mean
that he should have suspected there was a reporting obligation within 30 days of
completion even if there was no gain.
35 132. In my view his reliance on a third party, however misguided it turned out to be,
was reasonable and he took all reasonable care to avoid the failure, namely none as
there were none he could have taken. So even if HMRC had pleaded that he could
not rely on a third party I would not have accepted their contentions.

HMRC's potential reaction:

All sensible stuff above, but we have to maximise our penalty revenue even if our behaviour is wholly unreasonable (why else would you drop the unknown penalty amnesty at a random time which just happened to coincide with the ability to levy those yummy £1,600 penalties... again with no warning...just some chap/or female equivalent in a dark office making it up off the cuff).

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And there is another HMRC NRCGT tribunal loss to follow because rbk123's case was heard by a different Judge.

I do feel for those who have been unsuccessful at Tribunal...their circumstances probably aren't a lot different from those who have won. This system is definitely broken and it all stems from rules that were not carefully thought through in the first place. HMRC you cannot continue to sit on your hands, show some leadership and direction, ACT NOW!

[LSH]

EFT - thank you so much for your continued updates to this thread.

I've skimmed over this finding and it is very interesting. Not only the parts regarding 3rd party reliance, but also with regards to the so-called 'soft landing' approach taken by HMRC initially which now seems officially confirmed.

It beggars belief that they decided to not fine people before 5 May 2016 which is completely arbitrary. Surely it would have made more sense (if anything) to extend that decision to the 31 October 2016 / 31 January 2017 deadlines for self assessment of the 15-16 year when any new and affected disposals would take place. That would at least have permitted those people who had not been informed of the law change to have another opportunity to find out about it whilst researching and gathering info for their annual self assessment.

Point being - if someone wasn't informed of the requirement to file at the point of sale prior to 5 May 2016, why does HMRC think they will miraculously become aware of it after that date? Most people only became aware of it at the point of self assessment. If HRMC are saying that this window was there to “to allow taxpayers and agents sufficient time to become familiar with them”, then if that disposal took place before 5 May 2016 (and for me it was in June 2015 so right after the law change) how do they think taxpayers or any agents involved would retrospectively know that something had changed which affected them before and that they think is already concluded?

I for one desperately wish that it HAD been a requirement of the conveyancers to file this on our behalf. Clearly though - they were as blissfully unaware of this as most tax payers were (and continue to be from the looks of things").

One thing that has also struck me is that when I bought the property initially and when I sold it, I was immediately contacted by the local council with regards to council tax obligations (for me to pay when I bought it and for me to provide more details on the buyer if I had them when I sold). I assume that they were somehow informed of my details via the land registry changes and that is how they contacted me. So this begs the question, that if the local council are able to do this in order to ensure council tax obligations are notified and met; why can't HMRC do something similar?

Anyway - thanks once again EFT for keeping us all up to date. Much appreciated.

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Point being - if someone wasn't informed of the requirement to file at the point of sale prior to 5 May 2016, why does HMRC think they will miraculously become aware of it after that date?

I asked this question of HMRC and receied the following reply:

We allowed customers up to 7 May 2016 to become accustomed to the new NRCGT legislation. This gave customers a year to become familiar with the legislation without having penalties charged for late submission.


This is a load of old guff...they realised the window of opportunity to levy £1,600 penalties was nigh and cancelled the unknown amnesty....without telling anyone....the behaviour of a Fruitbat...apologies to any Fruitbats who might be following this thread.

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More reasonable excuse analysis in the article link below (I suspect written before the release of the most recent Tribunal case):

read:https://www.accountingweb.co.uk/tax/hmrc-policy/tax-penalties-can-ignorance-of-the-law-be-a-reasonable-excuse?utm_medium=email&utm_campaign=AWUKTAX250618&utm_content=AWUKTAX250618+Version+A+CID_a4d8774995c180d9c10f6be7d01237ca&utm_source=internal_cm&utm_term=Read%20more

Assuming HMRC accept the recent reliance on an adviser verdict, how does that sit with the Taxpayers Charter pledge that taxpayers will be treated evenhandedly? To my simple mind if they accept an argument for one case (Eric S), why wouldn't they accept it for all cases, otherwise taxpayers are not being treated evenhandedly? I know the legislation police will explain that decisions at this level do not produce a legally binding precedent and for me to make such a comment makes me an oafish fool, but what is the point of the Charter if taxpayers with the same circumstances are on the receiving end of totally different outcomes?