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Where Taxpayers and Advisers Meet

NRCGT return

LSH
Posts:25
Joined:Mon Nov 06, 2017 5:11 pm
Re: NRCGT return

Postby LSH » Fri Nov 10, 2017 8:09 am

Thanks RBK and Lambs.

Urrghhh. Reading your post RBK makes me feel sick to the stomach. I incorrectly assumed that the case of Rachel McGreevey would make them see sense but obviously not. Makes me feel so angry. I guess I will wait and see what their response to my appeal letter is then, though given your story I won't hold my breath for a good outcome. The thing that makes it even worse is the massive delay between all of this (my letter will probably take a few weeks to arrive there and then they will take ages to respond and for that letter to arrive back). It just makes you sick with worry in the meantime. Like you, I have never been late in filing a return nor ever penalised before this. The whole thing is an utter debacle and even more infuriating as there was no bloody tax to pay on the flat sale anyway - it sold for the same price in July as it was under offer in April!

Reading the McGreevey case I am wondering if I should go down the route of there being no disposal after April 2015 anyway (and thus no requirement to file) as the offer on the flat had been made and accepted before April (so though formal contracts had not been exchanged then, the offer had been made and accepted and there were no subsequent changes to that offer / seller / buyer etc so effectively the agreement to dispose/contract was before the law change albeit not formally with the estate agents/ conveyencer). Not sure how likely I'd be to succeed on that though but I might add it to any subsequent stage of the appeal.

Anyway, I will keep the forum updated with any news. Thanks again to everyone for sharing all this - at least I don't feel completely on my own.

etf
Posts:1278
Joined:Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Fri Nov 10, 2017 2:42 pm

Thanks LSH and RBK for posting your experiences of the NRCGT penatly regime. Your stories are far more damaging to HMRC's flawed arguments than any number of rants from ageing tax practioners and even Lee Sharpe's brilliant articles on this topic.

I'm sad that HMRC appear to be giving a 'Harvey Smith' to the Rachel McGreevy judgement. The department appear to be reinforcing the judge's critiscism of HMRC's lack of common sense: see extract below:

The arguments advanced by HMRC about knowledge of the law are little short
of preposterous. To say that information about NRCGT returns is “well within the
public domain”, as if the public domain had boundaries where one could tell whether
something was just in it or well within it or completely within it, is also claptrap.

Even assuming that the appellant started to market her property or exchanged
contracts after 5 April 2015, it is also preposterous to expect that a document on
HMRC’s website which is not easy to find for a tax judge makes invalid all possible
excuses about not knowing of the NRCGT return deadlines.

There is a serious deficiency exhibited here in common sense, proportion and an
ability to consider the position of what HMRC calls its customers.


It also appears that 'Freedom of Information' is an oxymoron if HMRC can stop any data that might be interesting to their customers from being published.

KR & good luck!

etf

PS does anyone else finish off the judge's first paragraph with "and you've been conned" Boomtown Rats 1978?

Lambs
Posts:1611
Joined:Wed Aug 06, 2008 3:15 pm

Re: NRCGT return

Postby Lambs » Fri Nov 10, 2017 5:05 pm

No. I am not quite old enough...

(ageing...?!)

etf
Posts:1278
Joined:Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Fri Nov 10, 2017 5:59 pm

https://www.youtube.com/watch?v=opd14v2I7Ik

Perhaps we could ask Bob Geldof to re-record it as an NRCGT penalty protest song, with a judge in the video singing 'Claptrap' and taxpayers on the chorus 'we've been conned'...it has been a long week. :P

etf
Posts:1278
Joined:Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Sat Nov 11, 2017 3:51 pm

Given the information below, do we yet know whether HMRC has accepted the McGreevy decision? Is there a website which confirms this point?

228. This document contains full findings of fact and reasons for the decision. Any
party dissatisfied with this decision has a right to apply for permission to appeal
against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax
Chamber) Rules 2009. The application must be received by this Tribunal not later
than 56 days after this decision is sent to that party.
The parties are referred to
10 “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)”
which accompanies and forms part of this decision notice.
15 RICHARD THOMAS
TRIBUNAL JUDGE
RELEASE DATE: 12 SEPTEMBER 2017

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: NRCGT return

Postby bd6759 » Sat Nov 11, 2017 4:55 pm

https://www.gov.uk/government/publicati ... r-of-cases

It's unlikely HMRC will appeal. The judge found as a fact that the appellant had a reasonable excuse. It would need to have been a perverse decision based on other found facts to enable another court to overturn it.

The decision is not binding.

etf
Posts:1278
Joined:Mon Nov 02, 2009 5:25 pm

Re: NRCGT return

Postby etf » Sat Nov 11, 2017 6:13 pm

Thanks bd6759.

If HMRC does not appeal against the McGreevy decision, will that not allow other taxpayers in a broadly similar situation to claim a reasonable excuse on the same grounds? It is not as though HMRC alerted some sets of taxpayers to the filing requirement and left Rachel McGreevy off their distribution list. They left everyone off the distribution list!

I note (Sept 17) HMRC are now remedying their original oversight as individuals who submit a non-resident landlord application are receiving a paragraph in their application reply alerting them to the 30 day filing deadline. I'm not yet aware of any catch-up communications being sent to individuals who had already applied.

It intrigues me that having been heavily criticised by Judge Thomas, HMRC are happy to go into battle again with a defence as porous as West Ham's this season under Bilic. Perhaps my thoughts are naive; if they are I'd be grateful if anyone could suggest what HMRC hope to gain from a replayed match. Have they got a David Moyes equivalent up their sleeve?

KR

etf

Lambs
Posts:1611
Joined:Wed Aug 06, 2008 3:15 pm

Re: NRCGT return

Postby Lambs » Sat Nov 11, 2017 9:47 pm

They apply the same principle to reasonable excuse that they always have. Their own. The fact that it is obviously wrong in law, makes no difference to them. It doesn't matter how many times they are told by judges up and down the land that they are wrong: they still do it. It is not a mistake, otherwise they would have corrected themselves by now. The simple fact is, that HMRC no longer cares about applying the law correctly. It is all about the money. Whatever is in their power to grasp, they will take. And when public opinion is no longer on their side - when the public realises that HMRC will happily take from the "little guy" or the "man in the street" even when they are blatantly wrong to do so - the smarter ones at HMRC will understand how they have made their own bed. But the very smartest will simply turn around and say, "it was only ever a veneer, a convenient flag of passage: it was always truly thus".

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: NRCGT return

Postby bd6759 » Sun Nov 12, 2017 2:02 am

Thomas critices HMRC regularly and overturns most penalty appeals that come before him. I don't think he has forgiven the Court of Appeal for overturning Donaldson. Other judges are, perhaps, more circumspect.

Whether ignorance of the law is a reasonable excuse was covered in greater depth by Judge Simon Brown in Neal v HMCE way back in the 1980s.

These cases all fall on their facts. I am quite sure that if I were to sell a property in a foreign land, I would find out what the the reporting requirements were. That would be action of a prudent person exercising reasonable foresight and due dilligence, and having proper regardard to my responsibilities. (I m paraphrasing and have fogotten who actually aid that). The prudent person test stems from common law, predating most statutes.

Clealry in these NRCGT return cases the penalties can be dracomian in relation to the tax lost. Indeed, this can extend beyond these NRCGT issues. But that is a matter for Parliament, not HMRC.

LSH
Posts:25
Joined:Mon Nov 06, 2017 5:11 pm

Re: NRCGT return

Postby LSH » Sun Nov 12, 2017 11:40 am

Thanks BD769

Whilst I can see your point - I'd counter that by saying that for me (and probably RBK) it didn't feel like we were selling anything in a 'foreign' place at all. It's not like we are talking about filing returns re buying or selling in the countries we live now for example. We were selling up in the UK, and the UK had been home for all my life until 7-8 years before that point (about a decade now) and at which point of me departing, the law on selling was completely different. I actually thought it would be very straight forward.

I'd always understood that capital gains and losses were dealt with in the SA filing and that's what I was trying to do. I certainly didn't feel like I was being reckless (or even not prudent) as I'd heard nothing to the contrary about disposals being treated any differently. I have no adviser in the UK as the rental income was minuscule and below the personal allowance. The solicitor and estate agents involved in the sale said nothing at all about these requirements (and probably as they weren't even aware themselves). Now realising that there was so little publicity about this change in law and yet having been fined anyway makes me so frustrated. I have never been late or fined before.

I don't understand why HMRC did not send out an automatic alert to everyone in their database that had been filing non-resident forms and rental income forms at the very least. Surely that would have been a relatively simple process that could have been done at very little cost to them and yet it would have captured a large % of the people who could be affected. Does HMRC assume that all non residents are paying for (and capable of paying for!) advisers in the UK then? Even though they may have no tax to pay.

What I also do not understand is that I thought I had read that the law has now been changed (and applied retrospectively to APril 2015) and that if there was no gain no loss there is no requirement to file. That fits my case exactly, and yet they have still fined me. Am I misunderstanding that change in the law, re 12ZBA?

It's all just very frustrating and very stressful.


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