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Where Taxpayers and Advisers Meet

NRCGT return

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

Postby bd6759 » Sun Nov 12, 2017 1:55 pm

12ZBA refers to "no gain/no loss provisions". These are provisions which deem the disposal to be made at a value that does not give rise to a gain or a loss. (For example, transfers between husband and wife). It does not apply to transactions which merely result in no gain (or no loss).

Don't get me wrong. I don't think the legislations sets out what it intended to do. If a person was not inclined to notify chargeablity as required under existing legislation, adding an additional requirement to notify will not change that. All it is doing is creating a potential penalty position for those who do notify.

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

Re: NRCGT return

Postby LSH » Sun Nov 12, 2017 4:17 pm

Thanks again BD759 for clarifying that. Here was me thinking that the 12ZBA change might save and help me but obviously not.

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

Re: NRCGT return

Postby etf » Mon Nov 13, 2017 9:39 am

Hopefully any following judges will adopt the same common sense approach shown by Judge Thomas. We have to remember 2 1/2 years into this filing requirement one third of all filings have been late-can you imagine the headlines if that applied to self assessment tax return filings?

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.

KR

etf

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

Re: NRCGT return

Postby LSH » Mon Nov 13, 2017 10:20 am

Let's hope so ETF.

And that stat of a third of returns late was probably a whole lot worse within the first year of the law coming into force. They have had the benefit of a further 1 1/2 years on top now with more people becoming aware (and so more likely compliant with the deadline - or estate agents and solicitors also informing people). It would be interesting to see how many were filed late in 15-16 - I bet that would make interesting reading.

For info - my fine letter explained that one of the reasons it was coming now (meaning a long time after I filed in Jan 17), was as they were deciding what to do on the daily penalties. So the fact that a high percentage of late filers hasn't been fined yet in those FOI stats, is possibly due to that (and to their backlog). I expect to see the % of fines increasing again to be honest.

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

Re: NRCGT return

Postby etf » Mon Nov 13, 2017 10:37 am

More wise words in this opinion below (my bold type):

This week's opinion
18 October 2017
Judge puts HMRC on the penalty spot
The question of fixed penalties for failure to file tax returns when no tax is payable continues to concern me. I was discussing this with a well-known individual in the tax world only last week and his view was the same as mine. There ought to be some initial penalty for failure to file but any subsequent penalties should not be charged when no tax is due.

A new angle to this crops up in McGreevy (TC6109), which was an appeal against a penalty for failing to submit a non-resident capital gains tax return, even though no tax was payable. There is a 30-day time limit for such returns. In a coruscating judgment, Richard Thomas attacked the logic of the regime, the drafting of the legislation and the way in which the penalties were implemented by HMRC. The following extract gives a flavour of his approach:

‘The arguments advanced by HMRC about knowledge of the law are little short of preposterous. To say that information about non-resident capital gains tax returns is “well within the public domain”, as if the public domain had boundaries where one could tell whether something was in it or well within it, is claptrap.’

Cases like this make me think that it is time for an overhaul of the way that fixed penalties work. HMRC did launch a consultation on this as part of the Making Tax Digital process but I fear that the delays in MTD may have put that reform on the back burner. I hope I am wrong. The public needs to have confidence in the integrity of the tax system and how it operates. The way fixed penalties work now only serves to undermine that confidence.

If you do one thing…

If you have not read Richard Thomas’s judgment in McGreevy I recommend you do so whether or not you deal with non-resident capital gains tax returns. It is well worth a read, not least for the passion with which it is written. Paragraph 159 alone makes the whole decision worth a perusal and the footnotes are fun.

Andrew Hubbard

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

Re: NRCGT return

Postby bd6759 » Tue Nov 14, 2017 1:35 pm

To say that information about non-resident capital gains tax returns is “well within the public domain”, as if the public domain had boundaries where one could tell whether something was in it or well within it, is claptrap.
By that same argument, it is also claptrap to say that something is "well known" rather than simply "known"?

This reminds me of a scene from "The Big Bang Theory".
Stuart: You couldn't be more wrong.
Sheldon: More wrong? Wrong is an absolute state and not subject to gradation.
Stuart: Of course it is. It is a little wrong to say a tomato is a vegetable, but it is very wrong to say it's a suspension bridge.

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

Re: NRCGT return

Postby etf » Thu Nov 30, 2017 3:14 pm

I'm struggling to reconcile Mr Thompson's statement below with HMRC's on-going mistreatment of taxpayers affected by the NRCGT filing requirements (my bold):

Jon Thompson, Permanent Secretary at HMRC, said:
I am delighted that Jim has taken up this post in HMRC. There are some enormous and important challenges ahead for HMRC: our transformation programme to make us a world class, digital-first tax authority; our focus on supporting the honest majority and clamping down on the dishonest minority; and our work to rise to the challenges of exiting the EU – particularly on customs and the border.


Let us hope he and his colleagues finally come to their senses and practice what they preach!

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

Re: NRCGT return

Postby etf » Thu Dec 07, 2017 9:26 pm

Further to my earlier posts, I've received evidence which suggests HMRC are proceeding down the path of ignoring the McGreevy case altogether as some had previously predicted.

To attempt to verbalise my frustration with HMRC's actions let us take 3 non-resident triplet brothers A, B and C as an example:

All three brothers sold their UK properties on 30 May 2015. They were all unaware of the 30 day NRCGT tax return filing deadline until they started to complete their 2015/16 income tax returns on 28 October 2016. Having read the CGT tax return notes they all realise they should have filed NRCGT returns. Each belatedly makes the required filing on 30 October 2016 and they all subsequently receive a £700 late filing penalty.

Brother A lodges an appeal to HMRC against his £700 penalty pleading ignorance. His appeal is accepted without question and the £700 penalty is cancelled.

Brother B lodges an appeal to HMRC using the same appeal letter as his brother A. His appeal is rejected by HMRC and so he takes his appeal to tribunal. The judge accepts his appeal and severely criticises HMRC's actions. His £700 penalty is cancelled.

Brother C lodges an appeal to HMRC using the same appeal letter as his brothers A & B. His appeal is rejected by HMRC. Brother C has a heart condition and does not feel able to take his appeal to tribunal. He attempts to speak with HMRC about his case but is told the NRCGT appeals team do not speak to their customers. He then emails HMRC to point out how they are clearly not dealing with him in an even handed manner, because his UK property situation is identical to that of his two brothers who have both had their penalties cancelled. He also points out the similarity of his situation to the Rachel McGreevy judgement where her £700 penalty was cancelled. As no reply is received from HMRC after one month, he sends 5 reminder emails and makes 5 reminder phone calls over the following month and a half without receiving a written response. When a reply is finally received 2 1/2 months later, it makes no apology for the delay and just states HMRC cannot deal with email correspondence.

Folks, this example hopefully demonstrates how unevenly/unsympathetically those in the NRCGT department at HM Revenue and Customs are dealing with their customers. They are causing a great deal of stress to those affected (remember roughly 1/3rd of all returns have been filed late). They appear to be completely ignoring the McGreevy case and forcing anyone who does not agree with their flawed decision making to take their case to tribunal with the expense/stress that entails. It is a shame Margaret Hodge is not available to summon those responsible and get them to explain their uneven and flawed actions in a public forum.

KR

etf

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

Re: NRCGT return

Postby etf » Sun Dec 10, 2017 10:24 pm

:D HMRC lose NRCGT case again at tribunal!

http://financeandtax.decisions.tribunal ... C06173.pdf

It is clear that the Appellant had a genuine and honest belief that the gain could be
declared in her 2015-16 tax return, in January 2017. Taking into account my
reasoning above I find that the Appellant had a reasonable excuse for making that
mistake and the late submission of her NRCGT return, in the event that I am incorrect
5 and an obligation to make a return existed.
70. The appeal is therefore allowed and the late filing penalties discharged.

Surely time for someone at HMRC to finally review how they are unnecessarily putting huge stress on innocent taxpayers and wasting taxpayers' money on contesting these cases. Mr Jon Thompson please show us your above statement was not a meaningless sound bite and act now please. To quote a Scandinavian football reporter from the Margaret Thatcher era 'your boys are taking a hell of a beating'. Thank goodness the judges are showing common sense which has been sadly lacking in the department you are responsible for.

KR

etf

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

Re: NRCGT return

Postby LSH » Mon Dec 11, 2017 6:28 am

Thanks once again EFT for keeping us all updated. On my side, I have still heard nothing from the letter I sent to HMRC on 6 November but may try to follow up with a call to check that it is well received and being dealt with. I wonder if there is any way of finding out how many of these cases are going to appeal and how many are being found in favour of the tax payer rather than HMRC. Though there still seems no rhyme or reason in their decision making though (as per your example on the triplets above). I am praying my case won't go to appeal. The thought of the stress and cost of having to travel there from Central Africa to try to defend this is making me sick with worry already.


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