In July 2016 I found out that my client (who lives in Indonesia) had sold a UK buy to let property in October 2015. I immediately sent in a NRCGT return online. He now has a penalty notice for £1,300 for not sending in the return within 30 days of the conveyance. The gain returned is £204. The fine seems to me to be disproportionate and unjust because he, not unreasonably, expected to return the details of the gain on his 2016 tax return in the normal way. With hindsight I can see that I should have flagged this up just because he is a non resident landlord in case he happened to want to sell a property. I am looking for reasonable excuses to appeal this and pointed out that knowing he is non resident his solicitor should have warned him about the 30 days. The solicitor is well respected locally and has replied candidly that he knew nothing about the 30 day time limit and to be fair neither did I at the start of the 2015-16 tax year. I know that not knowing the rules is no excuse but this seems so unfair. If professionals don’t know about new online reporting rules how can the tax payer in Indonesia (where communications are not the best) be expected to know? Is there any way to challenge this and is anyone else in the same boat?
I have successfully appealed against a NRCGT penalty. The wording of my letter was as follows and it was accepted without question:
"Further to your email of 17 June 2016, we write to appeal against the penalty of £800 issued to our client for the late submission of the non-resident capital gains tax return.
The circumstances are as follows:-
Our client has been living in Australia since 2012, during which time he rented out his property. The income has been declared on my client’s income tax return each year.
Due to my client’s absence from the UK, he was unaware of the new rules that came into force on 6 April 2015, requiring the CGT return to be completed within 30 days of the date of sale of the property. Hence, no CGT return was completed when the property was sold in November 2015.
When it came to our attention, the non-resident CGT return was filed without delay. You will see from the return that there is no tax due and therefore there has been no loss to HMRC. Both we and our client apologise for the delay in filing the return but are confident that you will be able to see that it was not a deliberate action.
We trust that, in the circumstances, the penalty can be removed.
In the meantime, our client has paid the amount due and so, if our appeal is successful, we should be grateful if this amount could be refunded as soon as possible."
HM Courts & Tribunals Service provide guidance (leaflets T242, T243 and T244 – use the link to court and tribunal forms) on what happens after you make your appeal and on what happens at a hearing. We recommend that you read this in addition to our guidance below.
At the level of the First-tier Tribunal, there are different ways in which your case can be handled depending on the facts, such as what it is you are appealing about and how complex your case is.
Some cases are usually dealt with on paper. This means that the tribunal will just review papers submitted by HMRC and by you, and make their decision from those.
If your case is to be dealt with in this way, it is important that your papers are neat and tidy so that the tribunal can follow them. Read the section ‘How do I prepare my case?’, which guides you through organising your papers. If you are told your case will be dealt with on paper, but you would prefer to have a hearing, you can request one.
If you have any special needs, which they might need to cater for at the hearing, for example, if you have a disability, you should tell the tribunal in advance.