Postby etf » Wed Mar 07, 2018 10:00 am
A summary of the recent Jackson case from Smith and Williamson (my bold):
2.3 Penalties for late submission of non-resident CGT return
While there have been two recent cases found in favour of the taxpayer, this case follows the latest
appeals in finding that ignorance of the laws is not a reasonable excuse for the late filing of a nonresident
CGT (NRCGT) return. The FTT did however cancel all but £100 of the £1,400 of outstanding
penalties.
The taxpayer disposed of two properties, but filed the required NRCGT returns after the filing deadline. In
both cases no CGT was due. In respect of each property, initial £100 late fling penalties were issued, along
with a £300 penalty for failure to file within 6 months of the filing date and a further £300 penalty for
failure to file within 12 months of the filing date.
The FTT found that ignorance of the law is not a reasonable excuse and, as such, the £100 late filing
penalty on the first disposal stood. The taxpayer had not been allowed time to learn from his mistake,
though, and so there were special circumstance in relation to the second property. The £100 late filing
penalty was cancelled accordingly. This was in line with the decision in Welland v HMRC [2017] UKFTT 870
(TC).
The FTT also found that HMRC had overlooked penalty provisions that state that ‘Where P is liable for a
penalty under more than one paragraph of this Schedule which is determined by reference to a liability
to tax, the aggregate of the amounts of those penalties must not exceed 100% of the liability to tax’.
This was relevant as the two £300 penalties were within different paragraphs. As the liability to tax was
nil, HMRC had not applied these penalties in line with the legislation and all of the £300 penalties were
cancelled.
Jackson v HMRC [2018] UKFTT 0064 (TC)